1. (C) During the course of a meeting on an unrelated issue
with Mr. Camille Grand, Diplomatic Advisor to Defense
Minister Alliot-Marie, we inquired about the minister's
comments in the recent Financial Times article entitled
"France urges end to China arms embargo." We noted our
confusion over Alliot-Marie's reported statements that the
west could sell arms to China in order to preclude the
Chinese from manufacturing these same arms. Grand expressed
frustration with the reported quote, noting that it had been
taken out of context, and wondered whether the FT had its own
agenda on the embargo. He said that following the Nice
Defense Ministerial, the minister had granted the FT and the
French financial daily "Les Echos" a joint interview on the
European Union and NATO. The arms embargo question was an
unexpected one made by the FT. Grand pointed to the Les
Echos article for a more faithful rendition of the French
position; comments that the FT had not reported. The Echos
quoted the standard French position that the embargo is only
of symbolic value, not reflective of current relations with
China, and that it ought to be lifted.



2. (C) According to Grand, Minister Alliot-Marie believes
that it might be more useful for the west to sell limited
defense products, not on the EU's or France's list of
proscribed technologies or weapons, in an effort to limit
Chinese efforts to acquire such products/technologies
elsewhere or to manufacture what they could. The concept
behind the idea is that through such sales we will be able to
maintain a measure of control over Chinese acquisitions
through licensing and export regulations. We do not believe
that the Chinese would not try to reverse engineer defense
technologies, and for that reason, France will not relax its
existing export regulations, even after the arms embargo is
lifted, he emphasized. The Financial Times article,
unfortunately, did not cite this aspect of the minister's
argument, he added.



3. (C) Turning to a broader discussion of the arms embargo,
Grand reiterated the MOD position that France does not
believe that China would buy major systems from the west and
would likely continue to turn to the Russians. The Chinese
would not want to rely on the U.S. or Europe, as they fear
future restrictions/embargoes that we might impose. On the
French side, Grand stressed that even after the EU arms
embargo is lifted, France would continue to deny the export
of sensitive technologies that could have an adverse impact
on Japan, U.S. forces in the region or the situation in the
Taiwan straits. Grand concluded by observing that success in
controlling China will depend on how well we can control
technology exports, and cited the EU's planned reinforced
code of conduct as such an effort.

Leach