CONFIDENTIAL
73A
HK2026/13
INDEX
NO
31 JUL 1980
ICER
PA
CALL BY SIR LAWRENCE KADOORIE ON THE LORD PRIVY SEAL ON 28 JULY 1980
20
31.7.80
Present:
7.
Mr Clift
Rt Hon Sir Ian Gilmour HKK 16.616
Lawrence Kadoorie
Mr Arthur
RITONYA
-
-5 AUG 1980
$$
ISK OFF
1. Sir Lawrence Kadoorie described the evolution of discussions with the Chinese on a nuclear power station in Guangdong Province in South China. He stressed that his opinions represented his own calculations, not a definite knowledge of Chinese intentions.
2. Preliminary studies indicated that a nuclear power station would be practicable and more economical than a coal-fired one. Discussions with the Chinese in the executive and management committees established jointly between China Light and Power (CLP) and the Guangdong Electric Company (KEC) had gone well. Recently they had focussed on the question of financial participation in the project. The Chinese had asked originally that British/Hong Kong commercial interests should take a 40% equity share in a nuclear power company to be established in China. However, Sir Lawrence had seen no commercial sense in that from the Chinese point of view and had proposed that the Chinese Government, in their own economic interests, should finance and run the project. This had been badly received initially and the Chinese had now proposed that the British and Hong Kong Governments should take equity holdings in a Hong Kong company to be set up as joint owner with the Chinese Government of the operating company to run the nuclear power station. Sir Lawrence had undertaken to discuss this proposal with the two Governments without any commitment.
3. Sir Lawrence then gave his view of the political implications of the project. He gave the Lord Privy Seal a record of a dinner conversation between the chief Chinese negotiator and Mr Stones of CLP. This referred to the possible political significance of a project for the future of Hong Kong. Sir Lawrence said that he was about 70% convinced himself that an important motive of the Chinese was to contribute to the future stability of Hong Kong. He swa the idea as comparable with 'ping pong diplomacy' in US/China relations.
4. Sir Ian Gilmour commented that the Chinese negotiator had only said that the project might change the political view. He wondered whether it was the key point in Chinese minds.
5. Sir Lawrence said that he did not believe that it had started as the key point but id had become so. He saw three elements in Chinese thinking:
a) the attraction of Hong Kong industry into special
free zones on the Chinese side of the border;
CONFIDENTIAL
/b)