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CONFIDENTIAL

GRS 950

CONFIDENTIAL

FM B.T.C. HONG KONG 251000Z

DESKBY 2514002

TO IMMEDIATE DEPARTMENT OF INDUSTRY TELEGRAM NUMBER INDUS 145 OF 25 JULY 1982 INFO IMMEDIATE PEKING AND F.0.0.

MIPT - GUANGDONG NUCLEAR PROJECT

HKK166|l

D.A.

RECEIVED IN REGISTRY NO. 51 2 8 JUL 1980

FOLLOWING IS TEXT OF KADOORIE'S SPEAKING NOEE& FORCMEETINGREGISTRY WITH PRIME MINISTER:~

INDEX

PA

(Action Taken

BEGINS.

1) THOUGH IT IS ESSENTIAL TO PREFACE ANY VIEWS EXPRESSED ON CHINA WITH THE REMARK THAT IT IS EXTREMELY DIFFICULT TO INTERPRET THE THINKING OF THE CHINESE, I HAVE NOW COME TO BELIEVE THAT THE KWANGTUNG ELECTRIC COMPANY'S (KEC) DESIRE TO HAVE A NUCLEAR POWER STATION BUILT IN CHINA MAY HAVE IMPLICATIONS FAR BEYOND THIS PRIMARY OBJECT.

2) IF PING PONG DIPLOMACY CAN BRING ABOUT A RAPPROCHEMENT BETWEEN THE PRC AND THE UNITED STATES, THEN WHY CANNOT A NUCLEAR POWER STATION JOINTLY OWNED BY THE BRITISH AND HONG KONG GOVERNMENTS AND THE PRC BE A MAJOR FACTOR IN SOLVING THE PROBLEM OF PRC/ BRITISH RELATIONS OVER THE LEASE OF THE NEW TERRITORIES?

3) WHAT HAS LED ME TO BELIEVE THAT THIS COULD ACTUALLY BE THE CASE IS A NOTICEABLE CHANGE OF ATTITUDE DURING RECENT EXECUTIVE COMMITTEE MEETINGS AND, IN PARTICULAR, MR, SHIH CHAO-HSIANG'S INSISTENCE THAT THE PRC AND KEC WOULD WELCOME BOTH BRITISH AND HONG KONG GOVERNMENT PARTICIPATION IN THE PROJECT.

4) I SHALL NOT GO INTO DETAIL SINCE I HAVE PASSED RECORDS OF ALL EXECUTIVE COMMITTEE MEETINGS TO THE DEPARTMENT OF INDUSTRY SO THAT

THE U.K. GOVERNMENT CAN GIVE ADEQUATE CONSIDERATION TO THE REASONS WHICH HAVE LED TO MY PRESENT CONCLUSIONS.

5) HOWEVER, I WOULD PARTICULARLY MENTION THE CLOSE RELATIONSHIP THAT HAS DEVELOPED BETWEEN MR. W.F. STONES, CL AND P'S CHAIRMAN OF THE MANAGEMENT COMMITTEE MEETINGS, AND HIS OPPOSIT NUMBER, MR. CHEN GANG, DEPUTY CHAIRMAN OF THE KEC, WHICH HAS PROMOTED UNUSALLY FREE AND OFF-THE-RECORD CONVERSATIONS PRIOR TO EXECUTIVE

COMMITTEE MEETINGS - ALSO BEFORE, DURING AND AFTER MANAGEMENT

COMMITTEE MEETINGS.

6) IN THESE CONVERSATIONS, MR. CHEN GANG WHO, THOUGH NOT CHAIRMAN,

IS OBVIOUSLY THE PRO'S CHIEF REPRESENTATIVE AND THE MOST INFLUENTIA MEMBER OF THE KEC BOARD, HAS STRESSED, IN THE STRONGEST TERMS,

CONFIDENTIAL

/ STATEMENTS

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