CONFIDENTIAL
ECGD GUARANTEES FOR HONG KONG PROJECTS : ESSENTIAL FACTS
1. ECGD are being asked to guarantee more large export orders
to Hong Kong. They are asking for more financial security (eg
guarantees by parent companies, banks or possibly Hong Kong
Government). Limits on undertakings which Hong Kong Government
can give. Governor liable to criticism from Unofficials if
seen to subsidise British exports. Risk of clients in Hong Kong
turning elsewhere (Japan and West Germany) if ECGD terms too
strict.
2. Two problems. One, for supply of buses, solved for immediate
future by agreement to Section 2 cover for current order. Other
is new Castle Peak 'B' Power Station jointly controlled by China
Light and Power and EXXON. Potential contract for GEC £1,000 million.
ECGD has doubts about viability of scheme and about likely total
demand for electricity in Kong Kong. Governor meeting DOI and
ECGD officials on 4 November to discuss them.
Secretary of State for Trade on 11 November.
Meeting with
Hong Kong and General Department
30 October 1980
CONFIDENTIAL