(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00447R000302210001-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: January 12, 2017
• Document Release Date: June 28, 2011
• Sequence Number: 1
• Publication Date: October 23, 1985
• Content Type: MEMO

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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
23 October 1985
Sino-French Relations: A Status Report
Summary
French Foreign Minister Dumas' recent visit to China focused pri-
marily on economic relations. The Chinese initialled an agreement to buy
French communications equipment and approved the establishment of a
new French trade mission in Beijing. Expanding trade ties with France is
part of a broader effort by China to diversify its sources of high-technolo-
gy imports, to encourage sharper competition among Western suppliers,
and to break down COCOM barriers to trade in more advanced Western
technology.
China has also sought to maintain good political relations with
France, but the two countries are not particularly close. China does pub-
licly support France's efforts to promote a strong, independent Europe able
to exert greater influence in NATO and over US strategic policy in general.
China has cast its support for the French Eureka project, for example, in
such terms, but we believe Beijing is mainly interested in acquiring access
to any new technology the program spawns. In recent years the only area
This memorandum was prepared by Office of East Asian Analysis. Infor-
mation available as of 23 October 1985 was used in its preparation. Comments and
queries are welcome and may be directed to the Chief, Foreign Affairs, China Division,
OEA,
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of contention has been Indochina, but the two countries have differed 25X1
more over tactics than objectives.
Both sides have often been disappointed in their efforts to expand trade. China's
perception that most French technology is not as good as that of the United States or
Japan has been a major impediment, even though less sophisticated French technology
would be easier to absorb and in many cases more appropriate at this stage of China's
development. The Chinese also have complained about the high prices and lack of ade-
quate service support for French equipment, in addition to the reluctance of the French
to transfer technology with their sales. The French in turn have been frustrated by the
Chinese tendency to vacillate on contracts. They view Chinese stalling as a tactic to
French efforts to conclude a deal to build the Guangdong nuclear power project
have been plagued by such problems. The original memorandum of understanding was
signed in 1978, only to be "deactivated" shortly afterward when the Chinese leadership
felt compelled to cut capital spending to conserve foreign exchange. The French and
Chinese signed a new memorandum of understanding in May 1983 when President Mit-
terrand visited China, but the two sides have yet to come to terms on financing or non-
proliferation guarantees. Negotiations recently resumed and quickly broke down.
Meanwhile, the Chinese have concluded nuclear agreements with the United States and
Perhaps because of these problems, France initially was not an enthusiastic sup-
porter of a US proposal to streamline COCOM procedures that would result in expediting
the handling of export licenses for China. The French complained in both NATO and
COCOM meetings that these reforms would only enhance the already substantial US
competitive edge in the China market.
Over the past year, however, France has concluded important deals with China for
telecommunications technology that have turned it into an ardent supporter of COCOM 25X1
reforms. Last January, for example, a French firm sold approximately $55 million in di-
gital telephone exchange equipment to China. The French are closely watching the
progress of a Chinese case in COCOM that involves a $2 to $3 million packet-switching
network. French pursuit of US approval for this case is spurred by expectations of simi-
lar future orders from China. The French are also extremely interested in the Chinese
fiber optics market. ~~ 25X1
The net result is that total French exports to China, which had dropped from $450
million in 1983 to $310 million in 1984 rebounded in just the first half of this year to
$412 million. Encouraged by these successes, the French are now aggressively trying to
push their advantage in the transportation field, hoping to sell everything from the air-
bus to their subway system. So far this year they have sold three airbuses and 150
electric locomotives to the Chinese. In the second quarter of 1985 alone, the French
have sold $99 million in aircraft and aircraft-related products to China.
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We believe increased Chinese interest in French technology is part of a larger
effort to expand trade ties with Europe and lessen China's dependence on the United
States and Japan for advanced technology--if only marginally. The overwhelming num-
ber of Chinese requests for export licenses submitted to COCOM are still for US ad-
vanced technology. In 1984, for example, 83 percent of the total cases were US ones.
We believe the Chinese hope to give the European members of COCOM in particular a
larger stake in liberalizing, if not abolishing, COCOM rules regulating technology transfer
to China. Indeed, the Chinese have repeatedly lobbied the French as well as the other
Beijing has long had cordial--if not close--relations with France, the first West-
ern nation with which it established full diplomatic relations. China and France fre-
quently consult, but given the narrow, largely regional focus of their interests, they rare-
ly coordinate or cooperate on matters. Official contact is frequent and routine. Every
French President since de Gaulle has visited Beijing, including Mitterrand in 1983--a visit
Premier Zhao Ziyang repaid in May 1984. 0
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Chinese and French views on a wide range of foreign policy issues have con-
verged over the past few years because of overlapping strategic concerns about the
Soviet Union. China, for example, has come out in favor of Western Europe's playing a
stronger, more independent role in world affairs, which would provide a moderating in-
fluence on both superpowers and especially on the arms race. France has long sup-
ported such a role. Both also favor a strong NATO, as an important shield against So-
viet expansionism. The Chinese, however, and to a lesser extent the- French do not want
~L ~.- L.~~_J___ ~_ __ --_ - ___
China and France have adopted similiar views, moreover, on arms control issues
in recent years--each for its own reasons. Both have supported the US global approach
to the INF talks, and during Mitterrand's visit to Beijing in May 1983 the Chinese ex-
pressed support for the French position on exclusion of their nuclear forces from Sovi-
et-US INF negotiations. We believe Beijing feared that US acceptance of the Soviet
proposal for including French and British intermediate-range missiles in the INF talks
would set a precedent for Soviet insistence on the inclusion of Chinese missiles as well.
China and France also privately supported the US decision to proceed with the deploy-
ment of Pershing missiles in Europe to counter Soviet SS-20 deployments and strength-
e...~.. i ~e ., .......:...:.... ___...__
Recently, China has endorsed France's proposed Eureka project for European
technological cooperation and criticized the US Strategic Defense Initiative (SDI). The
Chinese share French concerns that SDI may escalate the arms race into outer space
and ultimately compromise their own limited nuclear deterrent. Although Eureka is cast
as a strictly civilian venture concentrating on such high-technology areas as high-speed
computers, robotics, biotechnologies, and lasers, the Chinese seem to be i norin the
fact that it could have a similiar effect on their own deterrent capabilities. ~ - 9
25X1
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Although the Chinese have expressed interest in participating in Eureka, they have
not specified what support they might provide. French diplomats recently told US offi-
cials that the Chinese do not seem prepared to engage in a real dialogue on SD1, and
the French do not expect China to contribute much, if anything, to Eureka. As a result,
the French have concluded that Chinese support for Eureka is based largely on China's
interest in emphasizing its differences with the two superpowers and in obtaining ac-
L~/~ I
In one area where France and China do have more solid, overlapping interests--
Indochina--the two have worked somewhat at cross-purposes over the past few years.
France under the socialist government of Francois Mitterrand has sought to lure Vietnam
out of the Soviet camp and create a better climate for a settlement of the Cambodia is-
sue by offering economic inducements. This approach appeals to the socialists' ideolo-
gical bent as well as French national interests in rebuilding historical links with the Viet-
The Chinese, however, were sharply critical of French policy when Mitterrand vis-
ited China in 1983 because they felt it undermined their efforts to isolate Vietnam. Sub-
sequently, Mitterrand has tried to reassure Beijing that he seeks the same objective it
does: the withdrawal of Vietnamese forces from Cambodia and the establishment of a
neutral state buttressed by international guarantees. We believe that the Chinese are
still uncertain about French intentions toward Indochina, because Chinese officials com-
plained after the recent Dumas visit that the French were not as understanding or sup-
portive as they could be of Khmer Rouge efforts to force Vietnam to the negotiating ta-
~.~ _ i i
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LJ/~ I
SUBJECT: Sino-French Relations
Distribution:
1 -Dick Williams, Office of Chinese Affairs,
Bureau of East Asian and Pacific Affairs,
Room 4318, Department of State
1 -John J. Taylor, Director, Office of Analysis for
East Asia and the Pacific, Bureau of
Intelligence and Research, Room 8840, Department
of State
1 -Douglas Mulholland, Deputy Assistant to Secretary
for National Security, Room 4324, Department of
the Treasury
1 -David Laux, National Securit Council, Room 302 OEOB
1 oom X238, Pentagon
1 - o n oan, DIO for East Asia, Room X238, Pentagon
1 -Byron Jackson, Office of Intelligence Liaison, Room
6854, Department of Commerce
1 -Robert Perito, Chief, China Office, East Asian and
Pacific, Room 2317, Department of Commerce
1 -Martin van Heuven, Office of Western European
Affairs, Bureau of European and Canadian
Affairs, Room 5226, Department of State
1 -DDI (7E44)
1 - NIO/EA (7E62)
1 - CEA/ (5D38)
1 - C/PES (7F24)
1 - PDB Staff (7F30)
1 -CPAS/ILS (7G50)
5 -CPAS/IMC/CB (7G07)
1 - D/OEA (4F18)
1 -Research Director/OEA (4G32)
2 - C/China Division (4G32)
1 - C/China Division/FOR (4G32)
1 - C/China Division/DOM (4G32)
1 - C/China Division/DEV (4G32)
1 - C/China Division/DEF (4G32)
1 - C/SEA (4F38)
1 - C/NEA (4G43)
1 - EURA/WE (6G28)
2 -OCR/C/RS 1 H 19
1 - DDO/EA
1 -OCR/CH (1 H 18)
1 - NIC/Analytical Group (7E47)
1 - C/DOO (3D 10)
1 - FBIS/NEAAD/China Branch (306. Kevl
DDI/OEA/CH/FORM
(31 October 1985)
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