COFIDE CIAL
CONCLUSIONS
24 In spite of the difficulties of securing a major UK manufacturing involvement in a proposed PR station in Guangdong, the project offers the potential for £330n worth of export business to the power plant industry and on that basis alone is worth pursuing. Although the UK's negotiating position is not particularly strong, the Hong Kong connection should appear of importance to the Chinese who have to satisfy both the Hong Kong Government and CLP before the project can proceed. Although there are limits to the willingness of the Hong Kong Government to press the argument for UK manufacturing involvement, CLP and its chairman Sir Lawrence Kadoorie are favourably disposed towards UK equipment and open to general influence on UK involvement. The UK night also exert direct political leverage at an appropriate stage in Peking where the final decisions on this project will be taken.
25 Though CLP are currently ill-equipped to proceed on feasibility studies into nuclear matters, the UI has technical support, particularly that of NFC, which should be made available to both CLP and the Hong Kong Government. Direct HMG involvement may from time to time also prove necessary to safeguard the UK's industrial and financial interests. In terms of foreign and nuclear policy there is no compelling reason for safeguards on any nuclear equipment or material we may sell to China. We should indicate our position to the Chinese, but in view of our concern about India we should sto. short of a formal commitment not to seek inspection. We should explore the scope for drawing them more fully into iterational efforts to contain nuclear weapons proliferation.
RECOMMENDATIONS
AC
We accordingly recommend that:
1.
2.
Irters should e.lorno contiming Ul. industrial and officiul involveme. Us in the nuclear project as set out in the paper.
hinisters should agree the UK's position on non-
SOLIDATTATAL
-3-