CONFIDENTIAL
3. THIS VERSION IGNORES YOUR OWN EXCHANGES WITH THE MINISTRY
OF FOREIGN TRADE ABOUT THE VISIT OF KADOORIE AND THE KESCO EXPERTS AND IS SO MUCH AT VARIANCE WITH WHAT CHENG TO-PIN
TOLD IAIN ORR ON 26 JANUARY (SEE HONG KONG TELNO 115 OF FCO) THAT I HAVE PERSUADED WEEDON TO ASK PRICE TO CHECK HIS STORY WITH
RICHARD SAMUEL IN FED. IF PRICE'S INTERPRETATION OF CHENG TO-PIN'S REMARKS STANDS UP TO EXAMINATION, I WONDER WHETHER POSSIBLE REASON FOR CHINESE DISMAY AT SLOW PROGRESS COULD BE UNREALISTIC PROMISES OF LARGE COMPENSATORY COAL PURCHASES BY OUR MINING
MACHINERY SALESMEN.
4. CONCLUDE THAT THE CHINESE HAVE NOT YET DECIDED HOW THEY
WISH TO PROCEED. SIR LAWRENCE KADOORIE'S MAIN OBJECTIVE IS TO
TEST CHINESE ABILITY AND WILLINGNESS TO BECOME REGULAR AND RELIABLE SUPPLIER OF COAL TO CLP BUT HE WILL ALSO BE PREPARED TO REMIND THEM THAT THEIR DEVELOPMENT OF THE SALES OUTLET WHICH HE IS OFFERING CAN BE HELPED BY PURCHASES OF BRITISH MINING MACHINERY AT PRESENT HE MUST BE CONFUSED BY CONFLICTING REPORTS OF CHINESE THINKING ABOUT A COMPENSATORY DEAL. IT WOULD THEREFORE BE HELPFUL IF IN TALKING TO PRICE, SAMUEL COULD SEEK TO CLARIFY
WHETHER THE CHINESE ARE KEEN ON A COMPENSATORY DEAL OR WHETHER KADOORIE SHOULD SIMPLY CONCENTRATE ON HIS COAL PURCHASES, SO THAT YOU CAN ADVISE KADOORIE ACCORDINGLY.
5. I HOPE THAT YOU CAN MANAGE TO SEE KADOORIE AND STONES, DEPUTY
GENERAL MANAGER OF CLP (WHO ARRIVES PEKING BY CA132 ON MONDAY) AT AN EARLY STAGE OF THEIR VISIT IF ONLY TO EXPLAIN PRESENT VAGUENESS OF CHINESE POSITION AND LATEST STATE OF PLAY REGARDING OUR MINING
MACHINERY SALES. I SHALL EXPLAIN TO STONES THAT YOU WILL BE PREOCCUPIED WITH OTHER VISITORS.
MARCH
FILES
TRED
MR BUTLER
FED
MR CORTAZZI
HK & GD
PUSD ECON D FRO
MR THOMAS MR MURRAY MR HAYES
COPIES TO CRE4' DOT IC2 DOI
-2- .CONFIDENTIAL
Page 135Page 136