CONFIDENTIAL
Reference.......
visit to precipitate decisions on the Chinese side.
However, in order
for this to be possible, it would be necessary for the Chinese to have aken decisions by then on whether to proceed with the project and on the nuclear island vendor.
12 As requested by the Secretary of State for Energy in his minute of 18 February, we are proceeding to seek the views of the State Department in Washington on whether clearance would be given for PWR technology to be transferred to China through the National Nuclear Corporation as Westinghouse's licensee. If the response is encouraging, Westinghouse, the National Nuclear Corporation and GEC will need to proceed with further detailed discussions to establish whether a coherent package on the nuclear island could be offered to the Chinese.
13 There remains outstanding the invitation issued to the National Nuclear Corporation (NNC) in February to lead a delegation to Guangdong to discuss the prospect for supplying a Westinghouse nuclear reactor through the UK as a means of side-stepping non-proliferation constraints. Present indi- cations are not promising in terms of the level of UK equipment which the Chinese would be prepared to contemplate in an American nuclear package. As the Secretary of State is aware in reply to enquiries about the nuclear supplier made by our commercial counsellor in Peking on 1 March, the Head of the Nuclear Bureau said that certain people in Britain wished the UK to supply both the conventional island and also the main components of the nuclear island which would be manufactured in Britain and West Germany under Westinghouse licence. This was not acceptable to the Chinese side. The UK was welcome to compete for the conventional island but not for the nuclear. The composite proposal was unproven and China did not wish experiments carried out at her expense. And CLP remain adamant in their opposition to what they perceive as a "hybrid" package. However the se views do not take account of the experience the UK has already acquired in providing equipment for other nuclear stations. Accordingly we consider that provided a coherent and convincing package can be put together by Westinghouse, NNC and GEC, the NNC led mission to Guangdong should take place, though its exact timing will be a matter for careful consideration.
14
The approach to the State Department and the proposed NNC led mission to Guangdong will enable us to take forward the American option. In line with the Prime Minister's endorsement of our general policy to continue to
seek to develop both options, we also propose that discussions with the French should be renewed, both at official level in Government and at commercial level between GEC and Frama tome. Our objectives would be to try and clarify French thinking on the project and to define further the possible collaborative role for the UK including fuel supply in a French nuclear island.
Summary
Briefly the next steps contemplated are the se:
CODE 18.77
1
2
3
official level visit to Guangdong to discuss financing further;
NNC led visit to Guangdong to discuss American nuclear island to go forward provided the response from the State Department is favourable and a convincing nuclear package can be offered to the
Chinese;
discussions with the French to be resumed at official and commercial level.
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