GR 700
•MMEDIATE
CYPHER CAT A
FM FCO 251806Z
CONFIDENTIAL
CONFIDENTIAL
HKK 164/1
RECEIVED IN REGISTRY MO. 51
2 8 JUL 1978
REGISTRY
DESK OFFICER INDEX
PA
Action Tren
No
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See (199
198
TO IMMEDIATE PEKING TEINC 412 OF 26 JULY AND TO IMMEDIATE BTC HONG KONG
MIP T: HONG KONG COAL DEAL HEREWITH TEXT REFERRED TO:-
QUOTE
197
SALES OF COAL TO HONG KONG FOR CAPITAL GOODS AND ASSOCIATED SERVICES
THE POSSIBILITY OF COMPENSATORY TRADING BASED ON CHINESE SALES OF COAL TO HONG KONG HAS BEEN THE SUBJECT OF A NUMBER OF DISCUSSIONS WITH THE PEOPLE'S REPUBLIC OF CHINA: NOTABLY THOSE BETWEEN MR EDMUND DELL, SECRETARY OF STATE FOR TRADE AND MR LI CHIANG IN NOVEMBER 1977, AND MR KU MING IN MAY 1978 AND: MOST RECENTLY, BETWEEN SIR LAWRENCE KADOORIE AND AUTHORITIES IN CHINA. HER MAJESTY'S GOVERNMENT (H M G) ENVISAGES THAT THE GENERALITY OF SINO-BRITISH TRADE WILL BE CARRIED ON IN THE NORMAL WAY. BUT H M G RECOGNISES THAT ENTERPRISES MAY FIND MUTUAL BENEFIT IN CONCLUDING COMPENSATORY TRADING DEALS AS A MEANS OF EXPANDING THE LEVEL OF TRADE BEYOND WHAT IT WOULD OTHERWISE HAVE BEEN.
2. SIR LAWRENCE KADOORIE IS PUTTING FORWARD A SPECIFIC PROPOSAL TO MR SUN SUO-CHANG, DIRECTOR OF THE THIRD BUREAU, MINISTRY OF FOREIGN TRADE, WHEREBY COAL IS EXCHANGED FOR A BULK ELECTRICITY TRANSMISSION. SYSTEM, A RURAL ELECTRIFICATION SCHEME AND THE SUPPLY OF ELECTRICITY. BRITISH ELECTRICITY INTERNATIONAL, THE OVERSEAS CONSULTANCY ARM OF THE CENTRAL ELECTRICITY GENERATING BOARD, IS PARTICIPATING WITH BALFOUR BEATTY IN THIS PROPOSAL.
3. ALTERNATIVELY CHINA MAY WISH TO CONSIDER UTILISING THE PROCEEDS OF ITS PROSPECTIVE SALES OF COAL TO THE KOWLCON ELECTRICITY SUPPLY COMPANY FOR PURCHASES FROM THE UNITED KINGDOM OF EITHER COAL MINING AND ANCILLARY EQUIPMENT, ADDITIONAL TO THOSE CURRENTLY BEING NEGOTIATED, OR POWER STATIONS AND GENERATING EQUIPMENT. THE GOODS AND SERVICES WHICH UK INDUSTRY CAN OFFER IN THESE CATEOGRIES INCLUDE -
CONFIDENTIAL
/
COAL
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