CONFIDENTIAL
NUCLEAR POWER PLANT CO-OPERATION WITH CHINA
BACKGROUND
The Chinese province of Guangdong has been investigating for some time the
possibility of installing a nuclear reactor. Initial contacts established between GEC (Hong Kong) and the Guangdong authorities were extended to the
NPC who have been in the lead from the UK point of view. As discussions have
developed, it has become clear that Chinese interest centres on the purchase
of a PWR and that in present circumstances the UK could not hope to supply
the whole reactor. At the same time it has also emerged that Guangdong plans
to pay for any reactor by selling half of the electricity it produces to
Hong Kong.
Hong Kong's role is therefore crucial. The UK's close links with Hong Kong, and in particular with its electricity utility China Light and Power (CLP)
a private utility which has placed about £500m worth of orders with the UK
power plant industry over the past two years - suggests that UK industry
should be given the opportunity to play a major role as hardware suppliers for the station. Export business worth some £380m could be in prospect
even though a foreign partner would be required who could supply the heart of the PWR the nuclear steam supply system.
Nuclear Proliferation considerations are a complication as the Chinese have
made it clear that they will not accept inspection of the nuclear installation.
However, this is not expected to be a major stumbling block as:-
(a) there is no requirement under the Non-Proliferation Treaty for
Nuclear Weapons States such as China to accept inspection;
(b) the French have already indicated that they would not seek
inspection other than assurance about non-diversion to Military uses;
(c) such issues are primary concern of the country supplying the
nuclear "island".