HL Deb 22 April 1980 vol 408 cc644-6

2.53 p.m.

Lord SHINWELL

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper. May I take this opportunity of congratulating the noble Lord on his safe return, despite the mishap to his aircraft.

The Question was as follows:

To ask Her Majesty's Government whether the visit to China by the Secretary of State for Defence has met with success and whether they will make a Statement.

The MINISTER of STATE, MINISTRY of DEFENCE (Lord Strathcona and Mount Royal)

My Lords, I am grateful to the noble Lord for his personal comments. The Answer to his Question is that my right honourable friend had talks on a wide range of matters with senior Chinese Ministers, including Premier Hua. In Shanghai he represented Her Majesty's Government at the opening of the British Aviation Equipment Exhibition. My right honourable friend found a considerable degree of common understanding on world issues, and a common recognition that instability in one region, such as in Afghanistan, can affect global stability.

On defence sales, we believe that the Chinese will want to move cautiously and to consider their needs and resources carefully before making or accepting any particular proposals. They are, however, looking to the United Kingdom as a major supplier in the future and, although my right honourable friend did not go to China to negotiate any specific contracts, we are confident that the understandings reached laid the best possible foundation for the further development of trade.

Lord SHINWELL

My Lords, I am obliged to the Minister for that reply. Can he explain why, when 12 months ago there was a great deal of excitement and, indeed, high expectation of sales to the Chinese People's Republic, there is now this caution? Can it be because the prices that we propose to charge are regarded as excessive?

Lord STRATHCONA and MOUNT ROYAL

My Lords, I think that expectations—and possibly expectations outside the Government—were exaggerated. Chinese trade negotiations are notorious for taking time to come to maturity. Prices are principally the concern of the companies themselves, but I should add here that the Chinese are having to be cautious, because we are very well aware that they have a very limited amount of foreign exchange available for the purpose of purchasing arms.