GRS 600
CONFIDENTIAL
FM PEKING
TO DESKBY 02100OZ DTI
TELNO IND US 1
OF 02081OZ JAN 86
CONFIDENTIAL
AND TO DESKBY 021000Z DTI/OTTER
KK
166/1
RECEIVED IN REGISTRY
03 JAN1986
AND TO IMMEDIATE FCO
DESK OFFICER
REGISTRY
INFO DESKBY 02090OZ ETC HONG KONG, HONG KONG.
INDEX
PA
Action Takan
e
N/T.
YOUR TELNOS INDUS 1 AND OTTERS 365 AND 366: GUANGDONG NUCLEAR
PROJECT
1
1. DAVIES SHOWED THE TEXT OF THE COMFORT DOCUMENT TO DAVIDSON BEFORE DELIVERING IT TO CATER ON THE MORNING OF 1 JANUARY. DAVIDSON WAS CONTENT. HE LEFT WITH US COPY OF A ONE-PAGE MEMORANDUM SIGNED ON 31 DECEMBER BY HIM AND PAN YANSHENG, SETTING OUR THE AGREED FINAL CONTRACT PRICE. THIS MEMORANDUM WAS DRAFTED BY THE JVC, DAVIDSON SUSPECTS, SO THAT A SIGNED DOCUMENT WOULD EXIST PRIOR TO LI PENG'S DINNER ON 1 JANUARY. DISCUSSIONS ON THE (MUCH FULLER) MEMORANDUM OF UNDERSTANDING WERE THEN CONTINUING, AS INDEED THEY STILL ARE TODAY. BOTH SIDES HOPE TO COMPLETE THESE AND SIGN THE
MOU ON 3 JANUARY.
2. IN DELIVERING YOUR TEXT TO CATER ON 1 JANUARY, DAVIES ASKED THAT IT SHOULD BE PASSED ALSO TO 30C WHO WERE UNOBTAINABLE DURING THE HOLIDAY. DAVIES DID NOT THEREFORE GET DRAWN INTO MAKING THE ADDITIONAL OR EXPLANATORY POINTS IN YOUR TURS, EXCEPT FOR THE ONE CONTAINED IN PARA 4 OF YOUR OTTER 356. CATER EXPRESSED
APPRECIATION FOR YOUR EFFORTS.
3. CATER ADDED THAT A PROBLEM WAS EMERGING BETWEEN DAVIDSON AND PAN ABOUT THE DATE OF THE FIRST DOWN-PAYMENT. DAVIDSON HAS SUBSEQUENTLY CONFIRMED THIS POINT TO US. THE JVC ARE OBJECTING TO GEC'S POSITION (LONG MADE CLEAR TO THE JVC) THAT 0.5% SHOULD BE PAID ON SIGNATURE OF LETTER OF INTENT. BUT DAVIDSON BELIEVES THAT THE JVC WILL GIVE IN IN THE END AND AGREE TO THE POINT
BEING STIPULATED IN THE MOU.
4. LI PENG'S DINNER WAS, IN HIS WORDS, PRINCIPALLY TO CELEBRATE THE NEW YEAR RATHER THAN DISCUSS BUSINESS. BESIDES US, THE WHOLE GEC TEAM HAD BEEN INVITED, AS HAD THE FRENCH AMBASSADOR, GOURIEVIDIS AND THEIR WIVES. LI PENG MADE A SHORT AND GRACIOUS OFF-THE-CUFF SPEECH. THIS HAS BEEN REPORTED BY XINHUA AND HAS ALREADY BEEN PICKED UP BY THE SCMP IN HONG KONG AND BY LOCAL BRITISH PRESS HERE. THE REPORT SAYS, INTER ALIA: QUOTE LI PENG EXPRESSED HIS CONGRATULATIONS ON THE RECENT SIGNING OF THE MEMORANDUM OF UNDERSTANDING (SIC) BETWEEN GNP JVC AND COMPANIES OF BRITAIN AND FRANCE ON FINAL PRICE NEGOTIATIONS FOR MAJOR EQUIPMENT AND SERVICES SUPPLY FOR THE PLANNED GUANGDONG NUCLEAR POWER STATION.
UNQUOTE.
CONFIDENTIAL
15.
2
J