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INFO ROUTINE HANOI, HONG KONG, PEKING, TOKYO, WASHINGTON

FROM SPD

UK/AUSTRALIA POLITICAL TALKS: 20 FEBRUARY

·

1 ON 20 FEBRUARY, MCLAREN CHAIRED TWO AND A HALF HOURS OF TALKS WITH FIELD, DEPUTY SECRETARY, MS WENSLEY, ASSISTANT SECRETARY AND PIERCE, ASSISTANT SECRETARY, AUSTRALIAN DFAT. THE TALKS COVERED CHINA, HONG KONG AND VIETNAMESE BOAT PEOPLE. ARMS SALES WERE ALSO RAISED (SEE MIFT). DISCUSSIONS CONTINUED THROUGH LUNCH

HOSTED BY GILLMORE.

CHINA

2.

WENSLEY TOOK THE LEAD FOR THE AUSTRALIAN SIDE. THE CURRENT

AUSTRALIAN VIEW WAS THAT THE REGIME WAS UNSTABLE AND THE PRESENT LEADERSHIP BRITTLE. ECONOMIC REFORM HAD STALLED. SOME LIMITED MOVEMENT TOWARDS REMOVING RESTRICTIONS IMPOSED AFTER THE

PRO DEMOCRACY DEMONSTRATIONS IN JUNE 1989 HAD BEEN NOTED BUT

THIS DID NOT AMOUNT TO MUCH.

3.

*

AS REGARDS POLICY AUSTRALIA WAS ANXIOUS TO REMAIN GENERALLY IN LINE WITH OTHER WESTERN COUNTRIES. A FURTHER POLICY REVIEW

WAS UNDER WAY. IN THE MEANTIME EXISTING POLICY WAS BEING APPLIED MORE FLEXIBLY WITH DECISIONS ON INDIVIDUAL VISITS ETC NOW DELEGATED TO BELOW CABINET LEVEL. IT HAD BEEN AGREED THAT VISITS BY PROVINCIAL GOVERNORS AND STATE PREMIERS COULD RESUME. SUPPORT FOR THE GOVERNMENT'S POLICY WAS WIDESPREAD AMONG ALL SECTIONS OF THE COMMUNITY. BUSINESS INTEREST HAD DECREASED BUT THIS HAD BEEN NOTICEABLE BEFORE JUNE 1989. THERE WERE NO IMPORTANT NEW JOINT VENTURES.

4. MCLAREN SAID THAT THE UK ANALYSIS OF THE PRESENT POLITICAL SITUATION IN CHINA WAS VERY SIMILAR. AS REGARDS POLICY THE MEASURES ANNOUNCED BY UK IN JUNE 1989 HAD SUBSEQUENTLY BEEN SUBSUMED INTO THOSE AGREED ON BY ALL EC COUNTRIES AT THE MADRID SUMMIT. WE HAD NOT BEEN IMPRESSED BY THE STEPS TAKEN BY CHINESE TO TONE DOWN THEIR REPRESSIVE MEASURES. WE NONETHELESS BELIEVED

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