TNAG-2794-FCO40-4034-Relations-between-Hong-Kong-and-Taiwan-1993 — Page 143

Odefence1111

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offensive capability, but also high visibility. Other equipment eg dual-purpose cross-country vehicles, small-scale surveillance enhancement kit is unlikely to arouse Chinese sensitivity on anything like the same scale. It will be up to the FCO, in liaison with MOD and DTI, to form a judgement about likely Chinese sensitivity in each case. The nature of the equipment, its visibility, the size of the order, and the chances of the UK being identified as supplier will be factors in reaching our conclusion.

If asked in public about HMG's policy on defence sales to Taiwan, we should avoid being drawn into detail. We should say that applications are considered case by case, but that the general principle is that HMG restricts sales of defence equipment to Taiwan.

III

NON-LICENSEABLE EQUIPMENT

Certain items (such as non-military vehicles, certain communications equipment in non-military mode, small coastal vessels, machine tools for weapons manufacture) may not be licenseable under the Export of Goods (Control) Order 1981.

If the PRC were to hear of the supply of such

non-licenseable equipment to the Taiwan armed forces they could protest. If HMG is approached by firms proposing to supply such equipment or otherwise hears of such supply, the firms should be told of the potential consequences and asked to avoid publicity.

It is not out of the question that the Chinese would still

react strongly to any major deal. We would need to make

clear that we had no powers to prevent non-licenseable

exports.

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