Mr Stones stated that if he were the customer, he would expect the
nuclear island vendor to supply the first charge so as to accept
in full liability for the performance of the plant. It was for the
reactor vendor himself to decide where he bought fuel but in any
event he would bear the risk.
Mr Paul then initiated a short debate on how the Guangdong Nuclear
Project fitted into China's overall energy policy. He wondered
whether there were any other nuclear projects in China, and whether
the Chinese were not in fact placing more emphasis upon hydro-
electric projects. Mr Stones said that he thought the project would
go ahead in Guangdong, rather than Shanghai, because of its nearness
to Hong Kong and the lack of local fuel resources, but most of all
because the project would be self sufficient in terms of foreign
exchange through the sale of electricity to China Light and Power.
There were already signs that Guangdong Province was running short
of foreign exchange as their purchases of electricity were declining.
There was no conflict between this project and hydroelectric
projects as the Chinese had an enormous short-fall in generating
capacity. Based upon a comparison with Hong Kong, (where consumption
was well below the level of industrialised countries), Guangdong
Province was short of 40,000 MW, and the whole of the People's
Republic of China was short of approximately 700,000 MW, a truly
enormous figure. Mr Potter added that his informants in the Second
Ministry of Machine Building had said that Guangdong is not part
of the overall nuclear policy which was to concentrate on small
indiginous plant.
Mr Lippitt then asked Mr Clift about the effect of the expiration of
the Lease in 1997, and the effects on foreign loans. Mr Clift said
6