TNAG-0636-FCO40-784-Supplies-of-electricity-for-Hong-Kong-1977 — Page 186

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by the DOI. I do not think that there is scope for a further intervention by the FCO at present. The important thing is for the DOI to press ahead with putting together a deal which will be acceptable to the CLP. As for the Chinese dimension, it seems, Flag from Peking telegram no. 24 of 11 May, that the Chinese are unlikely

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to have decided about supplying coal by the time that the CLP will need to place an order for generating equipment. I agree with Sir E Youde that it would be wise for the equipment to be supplied to take account of the possibility of using Chinese coal but to be capable of using fuel from elsewhere and I am sure that the DOI will take this point on board. I am concerned, however, that discussion of the Chinese supplying coal to the CLP and of the connected possibility of increasing British exports of mining machinery to China may distract attention from the major short- term objective of British firms securing the business with the CLP. That is a more tangible proposition and the one on which I think we ought to concentrate our efforts. It is reinforced, I think, by what the Governor has said in Hong Kong telegram no. 494 of 16 May. I am, therefore, making this point to the DOI. (See copy of my letter to MacDonald in the DOI.)

Flag D

Flag E

You said that we might want to ensure that Lord Goronwy-Roberts knows what is going on. As I have mentioned above, he is aware of what the CLP and the DOI/British firms are trying to arrange. I think that it will be enough to let him know where matters stand once the DOI have worked out a scheme to put to the CLP. (Lord Goronwy-Roberts' Office have seen all the telegrams.)

16 May 1977

Steul

JWB Stewart

Hong Kong & General Dept

Cc:

Mr Samuel (FED)

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CONFIDENTIAL