TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 24

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WILL BE IN CHINA IN THE 80S BUT SUCH A LINK WOULD ADD

AND ADDITIONAL ELEMENT TO CHINA'S INTEREST IN THE

STABILITY AND PROSPERITY OF THE COLONY. PROVIDING THEREFORE AS CHINA LIGHT AND POWER PROPOSE, THE EQUIPMENT

IS DESIGNED ALSO TO ACCEPT FUEL FROM ALTERNATIVE SOURCES IN CASE OF NEED, THE RISKS INVOLVED IN LOOKING TO CHINA

AS A SOURCE OF COAL SEEMS A FAIR ONE.

3. THE SECOND ELEMENT IS WHETHER IT IS WORTH TRYING TO BUILD INTO THE ARRANGEMENT AN ADDITIONAL DIMENSION

IN THE FORM OF A LINK WITH THE PROVISION TO CHINA OF

MINING EQUIPMENT FROM THE UK. THE UK HAS ALREADY BEEN

VERY SUCCESSFUL IN THE DIRECT EXPORT OF SUCH EQUIPMENT

TO CHINA. WHETHER THIS ADDITIONAL DIMENSION WOULD BE

OF INTEREST TO THE CHINESE WILL THUS DEPEND ON WHETHER THEY

WOULD GET A BETTER DEAL IN THE CONTEXT OF AN

ARRANGEMENT WITH CHINA LIGHT AND POWER THAN THEY COULD

GET BY DIRECT PURCHASE FROM UK COMPANIES. IT WOULD

ALSO DEPEND ON THE PRIORITY WHICH IMPORTS OF MINING

MACHINERY WILL HAVE BY 1982 SEMI COLON CHINA HAS A

GUBSTANTIAL MANUFACTURING CAPACITY HERSELF. IT MAY BE

THAT TRANSPORT AND PORT HANDLING EQUIPMENT, RATHER THAN PRODUCTION EQUIPMENT, WILL BE THEIR MAJOR NEED. THIS COULD ONLY

BE ESTABLISHED IN DISCUSSION,

IN DISCUSSION, IT IS PROPOSED THAT THE

ARRANGEMENT WITH THE JAPANESE REFERRED TO ABOVE SHOULD COVER

BOTH EXPORTS AND IMPORTS BUT IT IS NOT YET KNOWN HOW THE

LINK WILL BE MADE.

•

4. ON TIMING, THE CHINESE MIGHT BE READY TO GIVE BY

OCTOBER AN ASSURANCE OF INTEREST IN THE LONGTERM SUPPLY OF

COAL. BUT THEIR NEGOTIATING PROCESSES ARE NOTORIOUSLY

SLOW AND THEY WOULD BE HARD PUT TO IT TO REACH ANY MORE

COMPLEX AGREEMENT BY THAT TIME. KEI DAREN EXPECT THEIR

DISCUSSIONS WITH THE CHINESE TO LAST A YEAR AND I WOULD

HAVE THOUGHT THIS A REALISTIC ESTIMATE.

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15.

IF

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