Note for the File
CONFIDENTIAL
DE A
FEC 165/1
HKK lot).
Good
་༣
CHINESE COAL FOR THE HONG KONG POWER STATION
1. I spoke to Mr Peter Moulson in the Department of Industry about this and asked what the Department had in mind for the next moves on this project. I said that we were anxious that the scheme should not run into the sand after we had put the idea to the Chinese and obtained their agreement to the sale of mining machinery against the provision of coal. If the whole thing were to fall to pieces now we could expect a loss of confidence in us by the Chinese which would be detrimental to our trade relations in particular. I was sure that the Chinese would expect HMG to play some part in organising the scheme and would probably in any case look to us to start the ball rolling as it was we who, through the Embassy in Peking, had first raised the matter with them. While I agreed that much depended on CLP deciding on how much coal they wanted to take from China it was no good leaving CLP and interested UK companies to sort things out among themselves. The companies would no doubt be enthusiastic about the prospect of sales but, initially at least, would want guidance from us on how a package could best be put together.
2. Mr Moulson said that the Department were concerned that no one should receive the impression that, because of HMG's involvement, massive subsidies would be available for an ultimate deal. He took my point however and said that he would discuss with Mr MacDonald how they should now take this up with CLF in the first instance, perhaps through Mr March in the BTC in Hong Kong so that he could pick up the threads of earlier conversations on this topic. We would then know what to say to the Chinese and others.
6. Hayward
30 January 1978
cc:
Mr Thompson, HKGD
Mr K Purbrick, CRE4, DOT E Davies, PEKING
CC Hayward
Far Eastern Department
CONFIDENTIAL
Page 75Page 76
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