CODE 18-77
SS 8/78
Mr Clift
Cc: FED
CONFIDENTIAL
НКК 16GII
RECTFALL A PONTREM. 51
-4 AUG 1980
Reference
Enki.
76
Ma Clift (Hkg))
h
PA
[Action Teren
GUANGDONG NUCLEAR POWER STATION PROJECT
INDEX
Mw
જથ્થ
1.
The Chief Clerk has asked what our assessment is of the political implications of this project going ahead, and whether Peking have expressed a view.
2.
From the Hong Kong point of view, I am sure we would agree that Sir L Kadoorie is right in thinking that the project has considerable political significance. Hong Kong's importance to China in the context of her modernisation programme, in parti- cular as a source of foreign exchange, is such that she has a clear interest in the maintenance of economic stability in the territory.
3.
We know from recent Chinese reassurances to investors that China has no wish to see the present status of Hong Kong disturbed. However, we would be unwise to interpret this, at present, as being any more than implied acquiescence in some form of continued capitalist structure for Hong Kong. There remains the more immediate issue of maintaining business confidence in Hong Kong over the next few years, in particular among potential investors in the New Territories, who may soon begin to view with some concern the 1997 expiry date of the New Territories lease. It is in this context, in particular, that all signs of stability in the area are to be welcomed as helping to maintain business confidence. Chinese interest in PRC/Hong Kong/UK cooperation and the develop- ment of particular projects which strengthen economic interdepen- dence between Guangdong and Hong Kong should tend to contribute to our mutual vested interest in Hong Kong's stability. A major project such as the Guangdong nuclear power station could well play an important role, therefore, in reassuring investors as to China's interest in maintaining the status quo in Hong Kong.
4.
In discussing the political significance for Hong Kong of this particular venture, we concluded that such a project, situ- ated as it will be on the Chinese side of the border, might have less significance than would a major joint venture in the New Territories themselves. Sir L Kadoorie's view of the importance of the Guangdong project may therefore be exaggerated and it is doubtful whether it will in itself provide a solution to the question of the future of Hong Kong, as he seems to imply.
5. Sir L Kadoorie is seeing the Prime Minister today, and Mr Manzie, Deputy Secretary in DOI, tomorrow. This will give the latter the opportunity to spell out the problems on finance and risk liability. Thereafter, there will be an interdepartmental meeting to assess the significance of the Kadoorie visit and to consider next steps. Reporting this meeting to Peking and Hong Kong would provide an opportunity to ask the former for their assessment of the political significance of the project as far as the Chinese Government are concerned, since we have not yet had a
CONFIDENTIAL
/Peking