TNAG-0637-FCO40-785-Supplies-of-electricity-for-Hong-Kong-1977 — Page 87

IN RESPONSE TO MY DECLARATION OF HIIG'S INTEREST IN A POSSIBLE DEAL FOR COAL AGAINST MINING MACHINERY, HSU SAID THAT CHINA HAD IN THE PAST EXPORTED LITTLE COAL. IT WAS HOWEVER HER INTENTION TO INCREASE SUCH EXPORTS. PLANS FOR BOTH EXPORTS OF RAW MATERIALS AND OF IMPORTS OF EQUIPMENT WERE STILL UNDER CONSIDERATION BUT HE HAD TAKEN

CAREFUL NOTE OF WHAT I HAD SAID AND WOULD REPORT IT TO THE STATE PLANNING COMMISSION. THE COMMISSION WAS RESPONSIBLE FOR DRAWING UP THE OVERALL PLAN COVERING BOTH ASPECTS. IF, WHEN THE PLAN WAS DRAWN UP, A DEAL PROVED TO BE OF INTEREST RESPONSIBILITY FOR PURSUING THE MATTER WOULD REST, WITH THE MINISTRY OF FOREIGN TRADE,

3. WE HAD SOME DISCUSSION ON THE SOURCES OF EXPORT COAL AND THE PORTS THROUGH WHICH IT MIGHT BE TRANSHIPPED. IN THIS CONNECTION HSU REFERRED BOTH TO CHINWANGTAO

IN THE NORTH AND LIEN YUNKANG (MY TEL CREDA NO 55 OF 30 JUNE). HE ALSO SPOKE OF THE TRANSPORTATION FACILITIES WHICH WOULD BE REQUIRED BUT DID NOT SEEM TO THINK THAT 700,000 TONS IN 1982 WOULD BE AN IMPOSSIBLE TARGET IF THIS REQUIREMENT WAS PLACED UPON THE MINISTRY BY THE

PLANNING COMMISSION. HE RECOGNISED THAT THE NEED WOULD BE

FOR REGULAR SUPPLIES SINCE THE BOILERS WOULD BE DESIGNED

TO BURN SPECIFIC TYPES.

4. HE ALSO REFERRED APPROVINGLY TO THE EQUIPMENT WHICH

THE CHINESE HAD ALREADY IMPORTED FROM THE UK.

5. THIS IS ON THE FACE OF IT AN ENCOURAGING RESPONSE BUT SHOULD ADD THE CAUTION THAT IT IS A REACTION FROM THE MOST INTERESTED MINISTRY. HSU MADE CLEAR THAT, ALTHOUGH IT WAS THEIR INTENTION TO EXPORT COAL, THE EVENTUAL AMOUNTS AVAILABLE FOR EXPORT WOULD DEPEND ON THE RATE OF INCREASE IN DOMESTIC CONSUMPTION REQUIRED TO MEET THE EXPANSION OF THEIR OWN INDUSTRIES: AND THAT THE

EVENTUAL DECISION WOULD NOT LIE WITH HIS MINISTRY. NOR

CAN THERE BE ANY GUARANTEE THAT THE STATE PLAANNING COMMISSION WOULD AGREE THAT INCOME FROM THE EXPORT OF COAL SHOULD BE HYPOTHECATED TO THE ACQUISITION OF ADDITIONAL MINING EQUIPMENT SEMI COLON THEY MAY HAVE OTHER PRIORITIES. BUT I THINK THAT THE OBJECTIVE OF GETTING THE CHINESE AT LEAST TO THINK SERIOUSLY ABOUT THE POSSIBILITY OF A DEAL

WILL NOW BE ACHIEVED.

YOUDE