CUNZIDENTIAL
HKK 160
INDER
2 JUL 1978
11/7
(18)
Mr Murray
HONG KONG/CHINA COUNTER TRADE
1. We have notified the Department of Industry that you and Mr Hayward will be attending Mr Lippitt's meeting at 3.30 pm tomorrow (probably in Room 902, Ashdown House: to be confirmed later today).
2. As requested, I attach copies of the main papers from our files, beginning with the DTI's original telegram of instructions to Peking on 8 July 1977 (CREDA 629) and Sir E Youde's reports of his conversations at the Ministry of Foreign Trade and with the Vice Minister of the Coal Industry on 15 and 21 July 1977. You should then see Mr Hayward's minute of 23 May 1978 regarding the position reached at that time; this is followed by telegrams reporting subsequent developments, the record of Sir Lawrence Kadoorie's meeting in Peking in May this year, and the background to Mr Benjamin's recent visit to Hong Kong.
3.
As you know, the meeting has been called because of Mr Royce's misgivings about the way the project has been handled so far.
The DOI and DOT will have to explain what action they think can be taken between now and the time of Mr Dell's departure from Peking, where the Chinese can be expected to tackle him about our proposals.
4.
+
The piece of paper which Mr Benjamin took to Hong Kong might well have been expected to produce the reaction by Sir L Kadoorie which Mr March has reported. It sets out possible ways of arranging for contracts to be set up and offers HMG's assistance, but has no outline projects to proffer which might be undertaken by UK companies. Lack of detailed knowledge of what projects the Chinese might want need not be an inhibiting factor in
CONFIDENTIAL
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