YEA
2, IN RECENT DISCUSS THE CHINESE THEMSELVES HAVE GIVEN NO INDICATION ET THEY WANT A LINK (CF HONG KONG TELEGRAM NO: 115) AND UK MINING EQUIPMENT MANUFACTURERS ARE ALREADYWRQ VERY ACTIVE NEGOTIATION WITH THEM ABOUT FURTHER CONTRACTS. ON THE OTHER HAND, THEY HAVE AT TIMES REFERRED TO THE ORIGINAL PEPCO PROPOSAL (CF MY TEL NO: CREDA.117). MOREOVER IN THE RECENTLY SIGNED JAPAN/CHINA TRADE ARRANGEMENT THERE IS A PROVISION UNDER WHICH THE JAPANESE SIDE WILL IN EFFECT BE PROVIDING A CREDIT FOR THE SUPPLY OF PLANT FROM JAPAN AGAINST FUTURE REPAYMENT FROM THE PROCEEDS OF CHINESE CIL AND COAL SUPPLIES TO JAPAN, THIS ARRANGEMENT IS, ON THE JAPANESE SIDE, APPARENTLY FIXANCED THROUGH BOTH THE JAPANESE EXPORT IMPORT BANK AND NORMAL BANKING CHANNELS.
3. I COULD SAY TO KADOORIE THAT SO FAR THE CHINESE HAVE BEEN CONTENT TO DEAL SEPARATELY WITH THE ISSUES OF COAL SUPPLY AND THE SUPPLY OF EQUIPMENT, AND SINCE THE LATTER DISCUSSIONS ARE GOING WELL WE HAVE NO WISH TO PRESS FOR A LINK IF THE CHINESE DO NOT WANT IT.
BUT, DEPENDING ON YOUR RESPONSE TO PARAGRAPH 1 ABOVE, ! PRESUME I COULD ADD THAT IF DURING HIS VISIT THE CHINESE DID EXPRESS AN INTEREST IN CREATING A LINK, THEM HMG WOULD BE VERY READY, IN CONSULTATION WITH CLP, TO GIVE ANY ASSISTANCE WHICH MIGHT BE REQUIRED IN ENCOURAGING THE FORMATION OF AN APPROPRIATE GROUP OF BANKERS AND SUPPLIERS TO LOOK INTO THE POSSIBILITIES.
YOUDE
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