TNAG-0636-FCO40-784-Supplies-of-electricity-for-Hong-Kong-1977 — Page 163

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A J MacDonald Esq

IC2

Department of Industry Room 610

Victoria Street

London SW1

CONFIDENTIAL

Foreign and Commonwealth Office

London SW1A 2AH

16 May, 1977

Dear MacDonald,

HONG KONG POWER STATION PROJECT

1.

I have been looking again at what Sir Peter Carey said in his latest message to the Governor of Hong Kong about the progress we are making in working out a package to put to the China Light and Power Company (CLP) for the supply of British generating equipment (FCO telegram no. 366 of 13 May to Hong Kong).

2.

I am sure that there is no difference between us, but I would like to make it clear that I think we should concentrate our efforts on working out an acceptable deal to put to the CLP as soon as possible and not let ourselves be distracted by the possible openings for improved exports of British mining equipment to China. It would be very satisfactory, of course, if Chinese coal were to be the source of fuel for the CIP's new equipment and if that, in turn, were to lead to British mining machinery being more widely used in China. It is clear, however, from HM Ambassador Peking's telegram no. 24 of 11 May that it is likely to be some time before the Chinese make up their minds whether they are interested in supplying coal to the CLP and still longer, I think, before it emerges whether there would be any consequential benefit for the British mining machinery industry. I suggest that we should concentrate our efforts on the short-term and more tangible objective of winning the business with the CLF for a generating station able to accept coal or oil. This point is reinforced by what the Governor of Hong Kong has said in his telegram no. 494 of 16 May, a copy of which I enclose for convenience. I am sure the Governor is right in saying that the formulation of a British offer to the CLP is now rather more urgent than it was. You will no doubt be in touch with us about a reply to the Governor's telegram.

yours

Edm Steent

JOB Stewart

CC:

Mr Samuel (FED).

CONFIDENTIAL