DRAFT
HMG/FRC COUNTER TRADE PROPOSAL
HMG on behalf of UK contractors is interested in assisting the
Peoples Republic of China with its plans to develop its coal extraction, power-generation and steel industries, or such others as may be agreed as being of mutual interest to both sides. Recent discussions between the Peoples Republic of China and KESCO about the sale of coal to KESCO afford a means whereby the Peoples Republic of China will be able to purchase the most advanced equipment manufactured in the UK and to offset sums payable for such purchases against income generated by future sales of raw materials.
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On the basis that
a
b
Agreed contracts, including schedules of supply, have been undertaken for the sale of coal from the Chinese Peoples Republic to KESCO;
such contracts specify appropriate provisions for the price at which coal supplies will be delivered, and shall cover a minimum period of
years;
C payment for UK capital goods and payments for coal
shall be in the same denominated currency which for purposes of this present proposal shall be US dollars;
HMG will co-operate with the appropriate UK suppliers in the negotiation of contracts for the supply of UK capital goods on terms to be agreed up to the total amount of the contracted value of coal supply, inclusive of interest payments due on any financing arrangements agreed in support of the Supply Contracts. Should the schedule of deliveries be delayed or the value of payments for the coal be reduced to the extent that there may be any shortfall against the value of capital goods ordered, (including interest charges) HMG will co-operate in the negotiation of arrangements for the provision of a bridging facility or through corresponding arrangements for the supply of other raw materials to cover the additional payments.
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