CONFIDENTIAL
no more than an undertaking not to divert from civil to
military purposes any nuclear materials and equipment
supplied.
e) Whilst recognising the possible political effects,
mainly on India, of the sale of an un-safeguarded reactor
to China, insistence upon more stringent safeguards on non-
proliferation than those demanded by the French would only
result in a loss of commercial advantage without any counter-
balancing political gain.
f) It should in any event be our objective to draw the
Chinese into wider international discussion of nuclear trade
and non-proliferation, in particular by encouraging China
to join the International Automic Energy Authority (IAEA).
3
In view of the uncertainties surrounding the project and the
lack of any Chinese-and particularly Peking commitment to purchase,
we would not wish to tie ourselves down tightly but should give the
Chinese some indication of our likely position.
Indeed the Chinese
will probably not proceed further with us without at least an
indication of HMG's attitudes towards the issue of safeguards even
though the signing of any contracts and delivery of hardware would
not take place for several years.
4
We would therefore ask that you take the following action:
4.1 Express to the Chinese authorities the UK's justifiable
interests in the project especially as it impinges upon the
economic life of Hong Kong, the safety and security of its