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arrive at the 25% equity holding required by Chinese joint
venture law. In conversation with Bill Stones of CLP
recently, I gained the impression that potential investors
in the project would be forthcoming from the Hong Kong commu-
mity. On the other hand the Hong Kong Government will, I
think, be expected by the Chinese to have at least considered
the possibility of themselves taking equity in the project.
Although Li Peng himself did not propose this, it was clear
that the absence of a further commmitment by CLP leaves
the Chinese looking for alternative sources of equity.
A third aspect of the project which could probably be raised
at this stage is safety. We have periqdically seen signs
of great interest, not to mention concern, in Hong Kong about
the conditions under which the PWR would operate. Although
premature in the context of the whole project, assurances
from the Chinese at this stage that they recognise the
could avoid later alarms on both
importance of safety
sides of the border
I think it is clear that no final commitments can be under-
taken at the February meetings in either Peking or Hong Kong.
Our understanding is that the Chinese-decision making machinery
is still pondering the project's feasibility; the financial
structure of the project is under study by the client, bankers,
governments and suppliers alike, and many points remain to be
clarified; GEC's position, taking into account the political
importance of UK participation in the project, is a further
However, the outcome of the
matter for clarification.
Form SS'29A
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Continuation Sheet No. 2
File No.
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