CONFIDENTIAL
BRIEF FOR THE MEETING OF THE PRIME MINISTER AND SIR LAWRENCE KADOORIE ON 31 MARCH
BACKGROUND
Sir Lawrence Kadoorie is Chairman of the China Light and Power Company (CLP). In addition he has wide and extensive business interests in Hong Kong (see Annex 1).
OBJECT OF VISIT
This was to discuss with the Departments of Industry and Trade a new power station to be built by CLP in Hong Kong. CLP has always bought British plant and Sir Lawrence would like continue to do so.
While this is based to a degree on sentiment it stems from his appreciation both of the political need for the ties between Britain and Hong Kong to be seen to be strong and of the importance of stimulating British exports in the interests of Hong Kong's trade with Britain. Support for the new power station would be a further step in strengthening UK commercial and political links with Hong Kong.
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The lease of the new Territories expires in 1997 and doubtless some time before that the UK will enter into negotiations with China about Hong Kong's future.
LINKS WITH CHINA
Hong Kong had a deficit in the balance of trade with China of about £393M during the first six months of 1976. Hong Kong's export to China in the same period were about £9M.
It is not known what trade links Sir Lawrence has with the
Chinese.
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He has proposed that the new power station could be partly financed by supplying the Chinese with power in exchange for coal. This must, however, be a doubtful proposition because.
of Chinds shortage of coal and technical difficulties in
respect of the Chinese grid system.
PROPOSAL FOR A NEGOTIATED CONTRACT FOR THE NEW POWER STATION
Sir Lawrence has said that the difficulty in placing a contract on a negotiated basis with UK companies as CLP has done in the past is that at present UK prices are about 20% higher than those of the Japanese.
He wants to know whether British suppliers and the British Government would favour the idea of a special, negotiated price that would come within 5 to 6% of the Japanese so that CLP could justify not going out to international tender. (see
No comments yet.
Private notes are available after approval.