909.1
I
2010/2
RECETTE IN REGISTRY
1 8 DEC 1986
DESK OFFICER
ALGISTRY
INDEX
PA
Action Taken
Secretary of State for Trade and Industry
CONFIDENTIAL
John Turner Esq
Private Secretary to the
Secretary of State for Employment
Department of Employment
Caxton House
Tothill Street
LONDON
SW1
Dear John,
89
DEPARTMENT OF TRADE AND INDUSTRY
1-19 VICTORIA STREET
LONDON SW1H 0ET5422
Telephone (Direct dialling) 01-215)
GTN 215)
(Switchboard) 01-215 7877
8 December 1986
Л
ཀྱི་
الله
ал
FED
ابھی
PS
AHKD
SIR Y K PAO
-
NINGBO STEELWORKS
A
CHINA
I understand that Sir Y K Pao is to meet Lord Young at 3.00 pm tomorrow. He met my Secretary of State and Mr Clark today and I attach some briefing on the Ningbo project which Lord Young may find useful.
Sir Y K Pao said that Davy McKee and their financial advisors (Hong Kong Bank) were proposing a scheme to finance the project that included loans and an element of aid supported concessional finance. It was not clear what the precise make up of the loans would be but Sir Y K did say, contrary to our earlier understanding, that the Chinese are prepared to consider loans in a basket of currencies (eg Sterling, D Marks and US Dollars), though the 7 per cent target interest rate will be calculated in US Dollars.
On the question of officially-supported finance, Sir Y K said that the Chinese authorities needed to know what proposals HMG could make. Mr Channon said that a 25 per cent grant on the proposed UK content of £l billion was beyond our resources and that aid funding part of the project can into OECD consensus problems repeating what was said to Sir Y K. When he met the Prime Minister and Mr Channon in October. Mr Channon left it that the matter would be considered further.
DW1CIG