21
PRIME MINISTER
Drip to TRED
2). h.. cap
PUST
GUANGDONG NUCLEAR PROJECT
22
FEN
XPs MrBarton
کہنے
Piron া
Ms. N
A W. Harding
Dr Wilson
MED
PT.
Following the recent signature by GEC and HMG respectively of
memoranda dealing with the main commercial and financial
points on this project, you will wish to have a more detailed
report.
2 I was grateful for your rapid response, and that of colleagues, to Paul Channon's minute of 24 December seeking
authorisation for officials to match the French premium
level. This allowed our Ambassador to support GEC's position in discussion with Vice Premier Li Peng. Although GEC had to give further ground on price, they and the Chinese Joint Venture Company were able to reach agreement on price
and other commercial matters, signing a Memorandum of
Understanding on 3 January.
3
The Government negotiating team had several days' tough negotiations with the Bank of China on the financial package. They met especially stiff pressure on the ECGD premium and a demand that HMG should provide guarantees for the performance of the GEC equipment. They managed to deflect the latter point and to reach agreement on a premium level equivalent to
that of the French. The President of the Bank of China and
Mr Benjamin, the Under Secretary who has led the DTI effort on the project, signed an MoU on 6 January expressing the agreement reached. I am writing a letter of comfort to Vice Premier Li Peng on our continuing interest in the success of
the project.
MKK 166/1
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22 JAN1986
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