WAS INTERESTED IN REGARDING HIS VISIT WAS THE POSSIBILITY OF THE
SUPPLY OF COAL TO THE POWER STATION IN HONG KONG. SUNG THEN SAI
THAT THERE WAS ANOTHER PROPOSAL BY WHICH CHINA WOULD BUY 50 SET
OF MACHINERY NOW AND A FURTHER 50 SETS LATER AS A COMPENSATION
DEAL FOR THE COAL. WHEN I QUESTIONED THESE FIGURES HE SAID THAT
THEY HAD BEEN PUT FORWARD IN LONDON BY LI CHIANG. HE LOCKED
UNABASHED WHEN I SAID THAT IN MY PRESENCE DURING ALL THE TALKS
HELD IN LONDON WITH LI CHIANG LI HAD ONLY REFERRED TO SEVERAL TES OF SETS: HE MERELY COMMENTED THAT SEVERAL' MEANT MORE THAN THRES
4. WHAT WE HAVE BEEN UNABLE TO DISCOVER SO FAR IS WHETHER SUNK WAS BADLY MISINFORMED (WHICH IS NOT ENTIRELY IMPOSSIBLE) OR HAD LET SOMETHING OUT OF THE BAG DELIBERATELY OR OTHERWISE. I CANNT
PROMISE TO BE ABLE TO OBTAIN COLLATERAL SEFORE 15 MAY WHEN I SHEL
AGAIN BE SEEING MEMBERS OF THE MINISTRY OF FOREIGN TRADE.
5. I THINK THERE IS IN ANY CASE A GREAT LIKELIHOOD THAT EVEN
IF THEY ARE KEEN ON THE IDEA OF A COAL FOR EQUIPMENT DEAL THE
CHINESE WOULD HAVE DIFFICULTY IN FORMULATUG THE LINK.
SINCE WE PUT THE IDEA TO THEM IN THE FIRST PLACE, I THINK WE
REALLY MUST NOW BE PREPARED TO DRAFT A PIECE OF PAPER DESCRIBING
THE MODALITIES GO A DEAL IN SUCH A FORM THAT WE COULD PUT
IT TO THE CHINESE IF AND WHEN IT BECOMES OBVIOUS THAT THIS IS
WHAT THEY REQUIRE. IT WOULD NOT SEEM CREDIBLE TO THEM THAT
NEARLY A YEAR AFTER H M AMBASSADOR SPOKE TO THEM FORMALLY ON
THE SUBJECT WE WERE NOT IN A POSITION TO DESCRIBE OUR IDEAS EVER
IN GENERAL TERMS.
DAVIES
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