A catas

programme/where other fuel reserves were scarce and south China

was a suitable area.

was just beginning;

authorities.

Consideration of details such as finance

contact should be with the Guangdong

Gu Mu took the line that the Chinese had already

agreed an exclusive deal with the French which ruled out British

and that the French financial terms had been so

participation;

favourable that China could not refuse them. This account

differed from one given by another senior official two weeks

earlier, who said that no decisions on reactor type or suppliers

could yet be taken. But he warned that contracts would be by

international tender and that China was opposed to safeguards

inspection.

12.

These contacts took place before the joint feasibility

study had been presented. It had been intended that

Mr Parkinson would discuss Chinese reactions to the feasibility

study during his visit to Peking and Canton in late March.

his visit was postponed for parliamentary reasons.

But

This makes

it all the more important for Lord Carrington to indicate to the

Chinese the importance we attach to the project.

Tactics and objectives

13. Lord Carrington will wish to discuss with the Governor of

Hong Kong and the Ambassador which of the Points to Make should

be raised with Foreign Minister Huang Hua and which might be

better discussed with Premier Zhao Ziyang. Sir L Kadoorie will

also expect to be consulted. In principle, as suggested in the

Steering Brief, it seems best to refer to the question in very

general terms with Huang Hua, and attempt to draw a more

substantive response from Premier Zhao. The project falls within

the purview of the State Council; Zhao knows Guangdong well

(he was Party Secretary there before the Cultural Revolution);

any statements by him will carry weight with the Chinese economic

decision-makers.

/13.

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