CONFIDENTIAL
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delivered in 100,000 ton ships given that the depth of sea water at the Castle Peak site is 9 fathoms which is capable of taking, ships of up to 45 feet draught.
5.
During our conversation we dissuaded Sir Lawrence from pursuing the hint which he had received from a junior reporter of the Wen Wei Po newspaper that the Chinese could have an interest in a power link-up. This is his dream and I have no doubt that he will respond promptly to any move the Chinese make on that front. But the new point which emerged from our conversation was the almost certain need at the Chinese end of sophisticated coal handling equipment to load the coal on to bulk carriers. I think we are both agreed that we should not try to forge any unnecessary link between the purchase of coal by CLP and the sale of British coal mining machinery to China. If the former acts as a catalyst well and good; but we do not wish to get ourselves in to a position where our sales of equipment are dependent on CLP's willingness to pay Chinese coal prices. However, it seems to me that coal handling equipment at the ports is probably best pursued in the context of a bilateral deal and I am sure that the National Coal Board would be able and willing to provide the Chinese with the necessary expertise and advice about sources of supply. I recall that a National Coal Board expert Mr. Peter Broadbent spent a long time in Israel advising the power generating company on the problems of coal handing with the result that the UK secured a valuable order for equipment even though the generating plant itself was supplied by Westinghouse of the United States.
6. We shall now wait to hear the results of your talk with the Ministry of Foreign Trade. I believe that Sir Lawrence and Sir Sidney will follow whatever advice we proffer on how to handle the negotiations with the Chinese. I continue to stress the importance of creating a dialogue at the Peking end if we are to have any chance of meeting the time scale outlined by CLP.
c.c.
J.A
Stevart. Esa ORD
hong kong & General Dept., F.C.O.
A.J.P.Macdonald, Esq.,
IC2 Division, DTI.
R.C.Samuel, Esq.,
Far Eastern Dept., F.C.O.
J.C.Prison, Esq.,
CRE 4. DOT.
D. M. March
CONFIDENTIAL
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