CONFIDENTIAL
3. KATO THEN REFERRED TO THE PRIME MINISTER'S REMARK TO MR
FUKUDA, THAT HE HAD SEEN RECENT EXAMPLES OF JAPANESE SHIP PRICES
DEING HALF THOSE OF EVEN THEIR MOST EFFICIENT BRITISH COMPETITORS.
BOTH KATO AND MOTONO WERE SURPRISED AT THIS DIFFERENTIAL. KATO
SAID THAT, IF THE UK COULD PROVIDE EVIDENCE FOR THIS, HE WOULD BE PLEASED TO PASS IT ON TO TOKYO. CORTAZZI TOOK NOTE OF THIS OFFER.
4. KATO ALSO MENTIONED THE PRIME MINISTER'S EXCHANGES WITH MR
FUKUDA ON THE NEW POWER STATION CONTRACT IN HONG KONG. HE WONDERED
WHAT THE PRIME MINISTER HAD MEANT BY SAYING THAT BRITISH
INDUSTRY WAS CONCERNED THAT THE JAPANESE WOULD UNDER-CUT THEM AND
BY ASKING MR FUKUDA TO ENSURE THAT ANY JAPANESE TENDER QUOTE DID
NOT CUT ANY CORNERS UNQUOTE. CORTAZZI EXPLAINED THAT THE GOVERNMENT
ATTACHED GREAT IMPORTANCE TO PRITISH FIRMS WINNING ORDERS FOR NEW EQUIPMENT IN HONG KONG, ADDING THAT THE QUOTE DRITISH DIMENSION UNQUOTE WAS VITAL TO HONG KONG'S PROSPERITY AND EXISTENCE. WE
WOULD SHORTLY BE SENDING INSTRUCTIONS ON THIS TO YOU IN TOKYO.
OVEN
FILES
FED
HKGD
EID
PRES SEC
FRD
PS
PS/MR JUDD PS/PUS
MR CORTAZZI MR MURRAY MR FRETWELL
COPIES TO:
MR ROBERTS CRE 4 DOT MR MCGHIE EJU DOT MR DEARING DOI
f
-2- CONFIDENTIAL
G