invited to make proposals for the development el Gollowing the visit two miccions from the st: ! China and BSC and Davy International la ve bean proposals for the rehabilitation
new steel works fron a gremfield c
o contracts for blast furnaces, woyll tone coal project is likely to run to several billions of The steelworks rehabilitation is likely to cost about while a first assessment of requirements for the no suggests goods and services from this country (n supply then) of an order of 12
an order of 2-3 billion. Whil are likely to be the major areas with which thic chiefly concerned, there are also possibilities railways, ships and port works and
ny of similarly relate not merely to supply Lut to tor and erection of virtually a new indust-fel compl.
Tesign,
7
in..
lent
Me recognise that there are doubts thout, the Chinese' achinistrative and technical capacity to achieve 11 their anbi mus indu! growth targets set for 1985.
practice it may indeed to cond tine before firm orders are på god and of course these fon schemes must be dealt with in pil ges. Nevertheless the Ching so are giving every evidence of moving very fast townie ploch first orders. Our competitors have already ma outline offers of both supply and finance, and th Germans in particular are making every effort to requirements.
then cenema!
Japanese ment Chin s
the
this
Although it might be said that if China's plans proceed as they apparently intend there will be enough business for overyl is true for this country only if we can pesure the Chinese we can meet their needs, in terms of both indust vii capucius finance. As you know they have expressed doubt on both scores. I understand that when the Chancellor sew the Chinese Foreion Minister recently he gave him a firm assurance that all export credit facilities would be made available in order to support major expansion of our trade with China. If this assurance is to be translated into a firm expression of support for the major projects to which I have referred above it will be necessary for us to commit" ourselves, in principle at least, to very lenge figures indeed.
As you know, the OEIC have done 2 number of studien Chic in view of this we are not proposing to submit a detailed pater assessing the country's economic prospect. The general conclusions arrived at in their studies were that Chins is favourably pliced to take on a significant amount of new debt, given the prospects for increased export earnings through the sale of oil and coal and the probability that the major expansion in overseas borrowing that is now contemplated will be carefully regulated. I have referred above to the extremely optimistic view expressed by our own Advisory Council, and indeed banking opinion both here and overseas appears unanimous in taking a similar view. It is true of course that "market opinion" tends to be fashion conscious but it can scarcely be doubted that the UK would be gravely t fault if we were unable to take a reasonable if relatively sull share of the business which China will undoubtedly place over the next few years, because we were over-tinid in supporting our Own industry - which certainly needs the work.
We would estimate that over the next five years or so the potential business for which British firms might conpete could be of the order of $10-15 billion. Under Section 1 we will be able to offer cover