CONFIDENTIAL
angreed view had emerged and given the firmness of Gu Mu's
statement, this could be assumed to have happened.
Mr Allen, who was present during the Gu Mu/Rees meeting, said that the
talks had opened with the usual generalities from Gu Mu about economic
difficulties and reassessment of major projects, but when pressed by
Mr Rees to be more specific, he spoke in detail and with obvious
knowledge of the Guangdong nuclear project. He said that no final
decision had been taken that project would go ahead at all, and there
was still some internal debate about the preferences for nuclear or
hydro-electric power (though he did appreciate Hong Kong's lack of interest in hydro-electric power) but if a decision were to go ahead,
the Chinese would first approach the French with a view to their
supplying the nuclear portion and would at the same time tell the
French that they wanted the UK to supply the conventional plant. After
obtaining French agreement to this, the Chinese would approach the UK.
Mr Allen commented that as Mr Lippitt had said, it would be highly
unusual for a senior Chinese representative to make such detailed
statements unless there were an agreed view in Peking. In response to questions from Mr Havelock on the question of central versus local
powers, Mr Allen said that Guangdong province would run the project in detail after a decision in principle had been obtained from Peking. On the same theme, Mr Paul said that Gu Mu was in effect the man with
most authority in relation to foreign trade and although he was
recognised as being pro-French, he had considerable authority and his
comments must be taken seriously. Nevertheless, Premier Zhao may be less certain of the project going ahead at all and it is likely to be some months before any decision emerges. Me Lippitt continued by saying that he felt the final decision in principle was for Peking to take, leaving details to be worked out subsequently at provincial level. Furthermore the comments made by Gu Mu were the most authorative yet and to disregard these in favour of the views made by a minor official
in the provincial Government would not be wise. From GEC's point of view, his firm could not keep chopping and changing between prospective partners; a UK/US mission to Canton would certainly concern the French and could be poorly received by Gu Mu. Mr Davidson then commented that
we should not ignore CLP's views and its strong position in the project and given the strength of advice, his company would not want to
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