TNAG-0767-FCO40-971-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 99

PEKING

GR 310

CY HER CAT A

FM D T 1 261035Z

CONFIDENTIAL

4

HK & G D

134

пиро

Mr Charter

HKK164/1

TO PRIORITY PEKING TELNO CREDA 102 OF 26 MAY. INFO BTC HONG KONG.

COAL/MACHINERY/POWER STATION PROPOSAL

JUN 1978

◆ OFFICER

INDEX

PA

Action Teko:

ON 22 MAY CRE4 SPOKE TO PRICE OF GE C WHO QUOTED CHENG'S REMARKS TO THE 48 GROUP DELEGATION. AFTER REFERRING TO THE VISIT BY THE FOUR MINING MACHINERY MANUFACTURERS HE TURNED TO CHINA'S GENERAL TRADE PHILOSOPHY SAYING THEY PROPOSED TO USE CASH DEFERRED PAYMENTS AND COMPENSATION TRADING. THE ONLY LIMIT WAS THEIR CAPACITY TO ABSORB THE INCREASED LEVEL OF TRADE AND TECHNOLOGY. HE WENT ON TO SAY, ON COMPENSATION TRADING, THAT LI CHIANG HAD SPOKEN ABOUT COAL EXPORT PROPOSALS WHILE IN UK AND THERE HAD ALSO BEEN DISCUSSIONS WITH SIR EDWARD YOUDE. CHINA WOULD LIKE TO PURSUE THIS BUT HAD HAD NO DISCUSSIONS WITH THE BRITISH SIDE SINCE THESE CONTACSTS. CHINA TENDED TO SEE THIS AS A TEST CASE OF WHETHER THE BRITISH REALLY MEANT BUSINESS.

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2. PRICE IS NOW SAYING THAT HE MERELY WISHED TO REPORT CHENG'S REMARKS WITHOUT INTERPRETING THEM. BUT IN HIS CONVERSATION WITH US HE SAID HE THOUGH THESE REMARKS MIGHT WELL BE QUOTE TONGUE IN CHEEK UNQUOTE AND CHENG MIGHT QUOTE BE DELIBERATELY MISUNDER- STANDING UNQUOTE HOW MUCH THE BRITISH SIDE HAD IN FACT BEEN DOING TO ASSIST PROGRESS ON THE VARIOUS ASPECTS OF THE POWER STATION DEAL, THOUGH IT SEEMED TO HIM THAT THE CHINESE MIGHT WELL BE USING THIS CASE QUOTE TO GET THE IDEA OF COMPENSATION TRADING OFF THE GROUND UNQUOTE. THIS SEEMS TO BE A SUBSTANTIALLY DIFFERENT INTERPRETA- TION FROM THE ONE WHICH B T C AND LORD NELSON RECEIVED.

3. WE LOOK FORWARD TO HEARING HOW KADOORIE GOT ON.

4. DO 1'S PROPOSALS FOR THE NEXT STAGE OF DISCUSSIONS ABOUT COAL ARE BEING REPORTED TO YOU BY SEPARATE TELEGRAM.

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