CONFIDENTIAL
(e)
(f)
(g)
(i)
an increased domestic ordering programme: in summary, Mr Lippitt assured Mr Chen that the aim would be to provide HKE with a complete and competitive package.
His
Mr Chen indicated that HKE were looking to meet their total coal requirement from China: he recognised that Australian coal was an alternative possibility, and for negotiating purposes should not be discarded. But during his visit to China in August, he had satisfied himself that the Chincse desire to exploit their coal reserves for foreign exchange would always give an edge. discussions had also disclosed the initial preference of the Chinese for delivery FOB, and the preliminary re- action had been a readiness to make use fully of non- national freighters (it was not sure how firm this was since one of the motive expressed was the wish to avoid seeking authority within the Chinese bureaucracy for an allocation of vessels).
Mr Chen also responded favourably to the possibility of exploring how far HKE orders for coal could be used as a means of financing Chinese orders - particularly in the field of mining machinery on the understanding that some suitable agency arrangements were made with the UK suppliers.
IKE were very aware of the potential value of power station ash, and would be ready to explore arrangements for exploiting this: HKE were open-minded on the arrangements for doing so, and would be willing to consider a joint operation with CLP and a UK concern. It was suggested that here - as indeed in the transmission system - there could be advantages in employing the same companies as were involved in the CLP developments.
Mr Chen expressed his interest in the prospects for electric powered vehicles in Hong Kong: he had already spoken to the Association of Electrical Motor Vehicles (?).
It was pointed out that this was a field in which the UK was committed to significant development, and facilities existed where by some support could be given to pre- production proving of vehicles, which could take place abroad. Mr Lippitt agreed to use his best offices to arrange a discussion between Mr Chen and the appropriate Department experts.
It was agreed that Mr Chen would contact Mr March on return to Hong Kong to find a time that could be reserved to pursue these issues further during his stay in Hong Kong.
Changin
C B BENJA JIN
US/IIC
25 October 1978
cc: Mr Lippitt
Mr Clark
Mr Havelock (or) ME 9371