CONFIDENTIAL
4
into the project. (Both the Chinese and CLP appear to have thought that the
UK Government might be prepared to contemplate taking en equity holding. The
issue has not formally been put to Treasury Ministers but there is every indi- cation that it would not be looked on favourably).
In the context of the financial discussions we shall be seeking a clarification
of Chinese thinking on the nuclear island vendor. We need to know who the
muclear island vendor will be in order to put together a coherent financial
package for the whole project. More generally, however, it has been agreed
that in the course of this visit the delegation should not be lobbied from any
quarter on the advantages of either Westinghouse or Framatone,
Mr Rees
may be aware of the review conducted for the Prime Minister on this issue in
February. The Prime Minister concluded that we should keep open our options on
working either with Franatome or Westinghouse. Our official position is that
we await an indication of the Chinese preferences on the muclear island vendor.
For his own information, Hr Rees might like to note that GPC have invited the
delegation led by the National Nuclear Corporation and including representatives
of Westinghouse to visit Guangdong after Easter to explore the possibility of providing a Westinghouse nuclear island. This invitation has been accepted by
the National Nuclear Corporation but nothing specific has been said on timing
of such a mission, Before taking a view on this proposal we will wish to see
the outcome of the present visit and to make an approach to the State Department
in Washington to see whether the United States would be willing to contemplate PWR technology being transferred to China through the National Nuclear Corpora- tion acting as Westinghouse's licensee. CLP are strongly opposed to this visit which they see as encouraging the Chinese to contemplate competitive tendering for the project rather than taking a negotiated contract route on an Anglo/ French package.
Should the prospect of this visit be raised, Ir Rees might like to say that he understands that the National Nuclear Corporation were very pleased to receive
the invitation but further discussions need to take place, principally with the United States Government, before preparations could be made for such a visit,
MERAL
Department of Industry 19 March 1932