St. George's Building Hồng trong

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16th June, 1978

12)

At a subsequent meeting with Mr. Sun suo-chang, he mentioned that Sir Edward Youde, the British Ambassador, had spoken to him regarding the possibility of exchanging coal for mining equipment. His department was studying this. Mr. Sun mentioned that Mr. Li Chiang had expressed approval of this suggestion during his visit to London. The proposal to exchange electricity for coal was new to him and, initially, he advised that this be taken up with the Electrical Industry Bureau in Canton. As the discussion broadened Mr. Sun showed an ever increasing interest in our suggestions and he then decided to take

the initiative by saying that he would inform Canton and arrange appointments. It became obvious that he preferred 'compensatory deals' to straight purchases.

13)

Mr. Sun clearly has considerabie influence and it was gratifying that he suggested that we should make other visits to Peking in order to strengthen our links with him and his department.

14)

Our meeting with the officials in Canton was particularly pleasing in that genuine interest was evinced in the possibility of taking electricity from China Light & Power Co. Ltd., to their grid system at Shek Loong. It would seem that Kwangtung Province is very short of power.

15)

I mentioned that Mr. Stones had been a Director of CEGB, which is one of the largest electricity supply undertakings in the world, and was fully familiar with the expertise within this Nationalized Board. We expressed the view that this expertise could be made available to the Chinese if they so wished.

16)

17)

A list of people we met is attached for reference.

I am now convinced that the Chinese are looking to us for practical proposals, that leadership is essential, and that in the interests of all concerned we must provide that leadership.

18)

Having seen Shanghai both before and after 'liberation' I now have a better understanding of the mistakes made in the post-war period and, in my own small way, I am determined to do all I can to prevent this ever happening here.

19)

Hong Kong's survival as a special area, as the free zone of China with its special relationship with the United Kingdom, depends on our ability to effect a merging of interests thus preserving our advantage as a neutral point of contact between different ideologies and between East and West.

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