CONFIDENTIAL
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HKK 164
500
IMMEDIATE
CYPHER CAT A
FM FCO 071801Z
CONFIDENTIAL
TO IMMEDIATE PEKING TELNO 536 OF 7 DECEMBER
14/12
⚫en
AND TO HONG KONG FOR POLITICAL ADVISER: BRITISH TRADE COMMISSION, HONG KONG FOR MARCH
CHINESE COAL FOR THE HONG KONG POWER STATION
T
267, (268
1. THE DEPARTMENT OF INDUSTRY SAY THEY SHOULD KNOW BY THE
END OF NEXT WEEK IF THE UK IS TO GET THE POWER STATION CONTRACT. IF SO, THEY PLAN TO MAKE ANNOUNCEMENT SIMULTANEOUSLY IN HONG KONG AND LONDON. THEY WOULD LIKE, AT THE SAME TIME TO TAKE CREDIT FOR THE CHINESE COAL FOR BRITISH MINING MACHINERY DEAL WHICH WAS AGREED IN PRINCIPLE HERE LAST WEEK.
2. LI CH'IANG IS REPORTED TO HAVE MADE TWO STATEMENTS TO OUR MINISTERS ABOUT THIS:
(A) AT THE MEETING WITH MR VARLEY HE SAID THERE WAS SCOPE FOR FURTHER EXPLORATION FOR CHINA SUPPLYING COAL FOR THE POWER
STATION.
(B) AT THE MEETING WITH THE PRIME MINISTER HE IS SAID TO HAVE CONFIRMED THAT THE CHINESE GOVERNMENT HAD AGREED TO SUPPLY COAL.
THIS MAY AMOUNT TO A DECISION IN PRINCIPLE BUT WE FEEL IT IS TOO SOON TO SAY ANYTHING ABOUT A POSSIBLE DEAL WITH CHINA. THERE !S
A LONG WAY TO GO IN SORTING OUT THE MECHANICS OF ANY ARRANGEMENT
AND THE CHINESE MAY FEEL THEY NEED TO KNOW MORE BEFORE ANYTHING
IS FINALLY DECIDED AND THEY ARE PUBLICILY COMMITED. THE FOLLOWING DRAFT ANNOUNCEMENT, THEREFORE, SEEMS PREMATURE AND COULD WELL OFFEND THE CHINESE :
QUOTE SUBSTANTIAL QUANTITIES OF COAL WILL BE NEEDED FOR THE NEW POWER STATION: AT THE PRESENT TIME CLP/PEPCO ESTIMATE THEIR INITIAL REQUIREMENTS AT ABOUT HALF MILLION TONS IN 1982 RISING TO SOME 3 AND A HALF MILLION TONS PER YEAR IN THE SECOND HALF OF THE 1980S. IN ADDITION TO CO-ORDINATING PROPOSALS FOR THE POWER
CONFIDENTIAL
STATION
266,