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until the Chinese themselves have given a clear indication of support for the project at high level, and that it would be inadvisable at this stage for HMG to approach the Chinese, cicher directly or indirectly, for their views. We have therefore vried to find out more about the proposals by raising the matter with American officials in Peking, Hong Kong and Washington. It is clear that the Chinese Government are interested in Fluor's proposals but have not yet agreed in principle that the project should go ahead. Fluor representatives have talked in Hong Kong to representatives of China Resources and the Bank of China, and contacts have been made through Fluor's Hong Kong Chinese intermediaries with tho authorities in Peking. However, there is still no direct evidence that those in the top echelons of the Chinese leadership are really involved, nor that a high level political channel of communication exists between Fluor and the Chinese Government. Both we and Hi Ambassador Peking are very sceptical on both counts. HH
The UC State Department are not opposed in principle to the proposal, but are reserving judgment until the lines of a possible agreement become clearer. We have been told that the matter was not raised during Mr Kissinger's recent visit to China and that it will not be raised by President Ford during his visit to Peking in December.
Reports by travellers returned from China indicate that the Chinese have started work on a petro-chemical complex and oil refinery near Whampoa in Canton province. It would presumably be exploiting the same oil field as the proposed Fluor refinery. According to Fluor, the Whampoa scheme is estimated to be only about one-eighth in size of what is planned for Hong Kong and there is no link between the two.
Hong Kong & Indian Ocean Department
27 November 1975
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