Cable No. 2629, Ambassador Yoshida to the Foreign Minister, 'Prime Minister's Visit to China (Ohira – Deng Meeting) (A)'

Number (TA) RO98699 5167

Primary: Asia and China

Sent:  China, December 06, 1979, 21:40

Received: MOFA, December 06, 1979, 23:27

To: The Foreign Minister  

From: Ambassador Yoshida

Prime Minister's Visit to China (Ohira – Deng Meeting) (A)

Number 2629 Secret Top Urgent

The meeting took place on the morning of the 6^th. Following initial courtesies, the meeting took place as follows:

1. Government Loans

(1) First, Prime Minister Ohira spoke as follows:

Regarding China's modernization effort, Japan has also examined the matter under deliberation from the position of wishing to cooperate to the extent possible.  We welcome China's broadly conducting exchanges with Western countries. As for Japan, in line with cooperation with the West, in balance with Asia, especially with the ASEAN countries, and, as national policy, not conducting military cooperation, and as a result of having examined the proposals made via Vice Minister Gu Mu recently, we have decided to cooperate, taking Japan's finances into consideration, regarding the seven projects, including the hospital. Concerning six of the projects, there would be  50 billion yen for fiscal year 1979, at a total interest rate of 3 percent, deferred for 10 years, followed by repayment over 20 years, and with procurement untied in principle. We would like to cooperate regarding the hospital, too, as a symbol of friendship. We would like to have Japanese and Chinese working-level officials talk over the details henceforth. Regarding the Chinese side's estimate of 1.5 billion dollars for the six proposals, each fiscal year we would like to determine the grant amounts starting from next fiscal year, based on project progress, Japan's overall loan growth, and such. As for the details, I would like your agreement to raise them today formally with Premier Hua.

(2) In response to the above, Vice Premier Deng spoke as follows:

I can understand the Government of Japan, when examining this matter, taking every aspect into consideration. Of course, if I were to speak of what we want, nothing would be better than many projects and much money. However, this is the first time. Those in China involved in the yen loans may not be satisfied but, in my personal view, I think it is fine. If we were to attach conditions, it would be the first time. We will consider future problems later. It will be fine if we use this as a start. Li Xiannian and Gu Mu may state various opinions, but I think that, when all is said and done, we should respect the thinking of the Japanese Government.

2. Japan-Soviet Talks

(In response to Prime Minister Ohira's inquiring as to past circumstances and future prospects, Deng remarked as follows:)

The first round of talks in Moscow has ended. The result is that each side did nothing more than explain its own position.

The Soviets requested a settlement of such "small problems" as trade, technical cooperation, and cultural exchange, as well as an agreement on an abstract "document " of principles for state relations. However, there is no meaning in that. The Chinese side's concrete thinking is to remove the obstacles between China and the Soviet Union. With one million troops concentrated on the Sino-Soviet border and threatening China, it would be meaningless even if we were to put together an empty "document." China called for a reduction of Soviet troops on the border to the scale  of the Khrushchev era and for the withdrawal of Soviet troops from Mongolia.  The aim of the Indochina Federation, the creation of Soviet military bases there, would be a threat to Asia and the Pacific. He emphasized that it would have to be removed.

The Soviet Union, of course, does not agree with the above but, so long as there is no settlement to these problems, relations between China and the Soviet Union will not improve.

When I visited the United States, the administration was making every effort for the passage of SALT II in the Congress. At that time, I spoke of China's position: (1) We do not oppose talks and (2) do not oppose reaching an agreement, (3) but we will have no real settlement simply by making an agreement document. Even if China and the Soviet Union were to sign a hollow document, it would be deceiving the people of the Soviet Union, China, and the world. Border talks are absolutely not moving forward after more than 10 years.

We do not oppose negotiations themselves, which is why we decided  to hold the current Sino-Soviet talks in Tokyo.

[Translator's note: no paragraph 3 in source text]

4. Additional telegrams will follow on the Taiwan problem, the situation in China, and the Vietnam problem.

(End)