CONFIDENTIAL
Foreign and Commonwealth Office London SW1A 2AH
Keith Newton Esq
Department of Industry
Ashdown House
123 Victoria Street
SW1
Telephone 01-
Da
Your reference
Our reference
Date
29 October 1981
50
Dear Keith,
GUANGDONG
MILES...
1
1. Thank you for sending me a copy of the draft on finansial aspects of the project.
2. My only comment relates to the first paragraph of the section on equity on page 2 of the draft. I suggest it might be replaced by something on the following lines:
'The Chinese have made it clear that they are keen to see some degree of equity participation by foreign interests in major projects in China which have recourse to foreign technology and equipment. The Guangdong project is no exception. The reasons for this are likely to be derived from China's unhappy experiences with projects undertaken with foreign collaboration in the 1978-79 period, when planning and execution got seriously out of control, resulting in acute bottle-necks and disastrous financial losses. They probably hope that foreign equity participation will help to guarantee that the foreign partners see to it that such errors are not repeated. '
Yours Sincerely Alan Paul
A R Paul
Far Eastern Department
cc:
G Stevens Esq, AE2, Department of Energy
Bob Adams Esq, Treasury Richard Ranson Esq, ECGD
FCO
Martin Roberts Esq, JNU, FCO Alan Friar Esq, HKG-FCO
CONFIDENTIAL