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CONFIDENTIAL
CHINESE INTENTIONS
3. Chinese Prime Minister told HMA in October that Guangdong
province had delegated authority to pursue proposal and that Chinese government favoured limited nuclear programme. Recent retrenchment measures (including 40% cutback in capital construction) seemed likely to delay project but no confirmation
of this. Chief Secretary of Hong Kong told in Canton on 10 March that provincial authorities had approved feasibility
study and would be submitting to central government.
Time-
table for their consideration uncertain.
recent contacts that Chinese regard credit terms as crucial.
Unless UK can offer comparable terms to what they regard as very favourable French terms, our hopes for share of contract
could be affected. ECGD and Treasury are unhappy about
offering blank cheque, but essential at this stage to put down
marker in general terms.
But clear from
HONG KONG GOVERNMENT POSITION
4. Hong Kong government already rely on China for food and
water and would agree to CLP offtake of electricity from
Guangdong subject to satisfactory assurances on safety and
environmental issues, security of supply and price.
UK POSITION
5. Good prospects for
particularly turbines.
competence seem to have
Guangdong in February
UK suppliers of conventional equipment,
Chinese doubts about GEC's technical
been resolved by presentation in
But UK also interested in fuel supply
(BNFL) and enrichment services (URENCO), both of which have proven international capability.
6. GEC are negotiating 'exclusive' agreement with Framatome
for joint bid for Guangdong. In February 1981 Ministers
endorsed view that best hope of UK involvement lies in
collaboration with French and approved idea of GEC/Framatome
agreement.
CONFIDENTIAL
17.