CONFIDENTIAL
THIS IS A COPY THE ORIGINAL HAS BEEN CLOSED UNDER
FOI EXEMPTION NO. 27/1
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17.
Trade continues to expand. In 1985, British exports will havebeen worth about £400 million (up 27% on 1984) and Chinese exports about 300 million. But the United Kingdom, with a market share of about 2%, still lags far behind Japan, the United States and Hong Kong as a supplier and quite a long way behind West Germany. British businessmen still
need to show more stamina in this market, which is now
worth over $30 billion and is growing fast.
18. The commercial event of the year was the signature on 31 December of a price agreement by the General Electric Company (CEC) about the supply of equipment for the Daya Bay nuclear power station in Guangdong Province. this should lead later in 1986 to the conclusion of a contract
worth about £250 million.
19. In October, we told the Chinese that the British Govern- ment was willing to support a soft-loan facility of 100 million. In December, Lord Young said that this money could be followed by more. This pathbreaking step has undoubtedly
pleased the Chinese. I do not think it will lead to the crowding out of business on normal commercial terms. A possibility which I hope will be studied seriously is that at least some of the money available should be associated in cofinancing arrangements with World Bank lending to China.
20.
More work was done on the legal framework for trade and investment. A Nuclear Cooperation Agreement and an Economic Cooperation Agreement were negotiated and signed. Work on an Investment Promotion and Protection Agreement was almost
rounded off.
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