PM/82/65
PRIME MINISTER
CONFIDENTIAL
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Guangdong Nuclear Power Station
(40)
1. I have considered the case for British involvement in a
nuclear power station to be built in the Guangdong province of
the People's Republic of China. There is a possibility that the
UK could supply the whole of the conventional island, incorporating
the turbogenerator and ancilliary equipment together with up to
60% of the nuclear island. There would also be opportunities for
the sale of nuclear fuel.
2. The successful conclusion of this contract would lead to
significant export opportunities (up to US $2 billion) for British
companies seeking to participate in the project. Success here
would also provide a foothold in the Chinese market. There would
be attendant benefits to long-term relations between the UK and PRC
and more particularly between the PRC and Hong Kong. Such industria
cooperation (Hong Kong facilities would take some of the generated
electricity) would help to maintain confidence in Hong Kong at a
time when the territory's future is coming under close scrutiny.
3. There are difficulties, however, arising from the
non-proliferation aspects of the sale. Since the Chinese insist
that they will not accept International Atomic Energy Agency
safeguards or any other form of inspection, the contract will
represent an apparent retreat from our long-held position on
nuclear transfers with attendant damage to the credibility of our non-proliferation policy. We can expect criticism from India and
the Soviet Union on this apparently preferential treatment for
China.
4. On the other hand, the proposed sale raises no issues of
genuine non-proliferation concern. The deal would not conflict
with our formal obligations under the NPT or with the Nuclear
Suppliers Guidelines. China has already attained a nuclear weapons
capability without our help. None of the equipment or materials to be supplied are capable of significantly enhancing that capability even if it were economically sensible to divert them to military
The development of contacts with the Chinese on nuclear
use.
CONFIDENTIAL
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