TNAG-0638-FCO40-786-Supplies-of-electricity-for-Hong-Kong-1977 — Page 33

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STATION, THEREFORE, HMG HAS BEEN DISCUSSING WITH THE CHINESE GOVERNMENT OVER THE LAST FEW MONTHS AN ARRANGEMENT WHEREBY CHINESE COAL IS SUPPLIED FOR THE NEW POWER STATION IN EXCHANGE FOR ADDITIONAL IMPORTS OF UK COAL MINING MACHINERY, WHICH ENJOYS A HIGH REPUTATION IN CHINA, DISCUSSIONS WERE CONTINUED DURING THE RECENT VISIT TO THE UK OF CHINA'S MINISTER OF FOREIGN TRADE WHEN AN EXCHANGE ARRANGEMENT WAS AGREED IN PRINCIPLE: THE COMMERCIAL TERMS OF THE ARRANGEMENT WILL BE WORKED OUT IN DUE COURSE. UNQUO TE

OUR INITIAL REACTION IS THAT A SIMPLE STATEMENT TO THE EFFECT THAT DISCUSSIONS HAVE BEEN INITIATED WITH POTENTIAL SUPPLIERS WOULD BE BETTER IF ANYTHING IS TO BE SAID NOW. CREDIT FOR ANY EVENTUAL DEAL CAN STILL BE TAKEN LATER.

3. IT IS PERHAPS RELATIVE THAT EMRYS DAVIS MENTIONED THE POSSIBILITY OF ESSO MAKING A BID TO SUPPLY FROM ITS MINES IN AUSTRALIA AND HAS SAID THAT ESSO HAS A TIE UP WITH CLP/PEPCO.

4. GRATEFUL FOR COMMENTS FROM YOU AND HONG KONG AS SOON AS POSSIBLE.

OWEN

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HK OG D

COPIES

MREGAN MR FORSTER.

MR LOVE

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MR ASHWOOD

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