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CONFIDENTIAL
Porta (41)
GRS 200
CONFIDENTIAL
FM PEKING
TO PRIORITY DEPARTMENT OF INDUSTRY
TELNO INDUS 66
OF 090656Z APRIL 86
INFO ROUTINE BTC HONG KONG, PARIS
See
YOUR TELNO. INDUS 82 OF 4 APRIL
GUANGDONG NUCLEAR PROJECT.
1. WE AGREE THAT THE APPROACH TAKEN BY ECGD (PARAGRAPH 3 OF TUR) IS CERTAINLY WORTH A TRY. BUT ALTHOUGH CHINA'S FOREIGN EXCHANGE RESERVES ARE HEALTHY THE BANK OF CHINA ARE KNOWN TO BE ANXIOUS TO RESTRAIN OUTFLOWS AS MUCH AS POSSIBLE FOLLOWING A HEAVY TRADE DEFICIT LAST YEAR, IN THESE CIRCUMSTANCES WE MUST EXPECT THEM TO TRY TO INSIST AS A MATTER OF GENERAL PRINCIPLE ON RETAINING AS MUCH CONTROL AS THEY CAN OVER DISBURSEMENTS FOR ANY PARGE PROJECT.
2. TWO OTHER CONSIDERATIONS PROBABLY BEAR ON THE CHINESE POSITION:-
(A) THERE MAY BE AN UNDERLYING LACK OF CONFIDENCE IN ARBITRATION,
WHICH IS A FAIRLY NEW PRACTICE IN CHINA.
(B) THERE MAY ALSO BE CONTINUING APPREHENSION ABOUT THEIR
L-HABILITIES IN THE EVENT OF DELAY BY THE CONTRACTOR, DESPITE OUR REPEATED ASSURANCES.
3. WE AGREE THAT, IF THE BANK OF CHINA DO REJECT ECGD'S FORMULATION, ANY FURTHER ACTION WOULD HAVE TO BE AT THE POLITICAL LEVEL.
EVANS
GUANGDONG
LIMITED
[COPIES SENT TO NO 10 DOWNING STREET]
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ADDITIONAL DISTRIBUTION
GUANGDONG NUCLEAR
CONFIDENTIAL
нии 1664
RECEIVED IN REGISTRY
1 0 APR 1986
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