3.
CONFIDENTIAL
Sir Lawrence is anxious not to have to pledge the assets of China Light and Power in respect of borrowing by a new subsidiary raising funds for the transmission network. China Light and Power, rather than a company jointly owned by CLF and Esso, will be responsible for the transmission system. This matter is at present being considered by Department of Industry and ECGD officials, and a submission will be put to Ministers shortly. If the subject is raised, the Prime Minister should take note of Sir Lawrence's views by speaking along the lines of para (v) of the attached speaking
note.
ii
Prospects for UK sales to China.
Sir Lawrence will wish to emphasise the great scope for British trade with the new regime in China and the advantage which British industry should have from Hong Kong.
Sir Lawrence considers it important that UK interests look purposefully for ways in which China can be enabled to pay for goods from Britain (eg by barter arrangements or the export of natural resources as with the coal for the power station) as the Chinese are unlikely to have sufficient foreign exchange to pay for a large
increase in trade.
Speaking notes for the meeting are attached.
DEPARTMENT OF INDUSTRY
14 April 1978
2