190
IMMEDIATE
YPHER/CAT A
GR 490
FM BTC HONG KONG 251115Z
CONFIDENTIAL
CONFIDENTIAL
#KK 16+|!
Resta
TA
2 6 JUL 1978
WAK OFFICUR INDEX
NO. 31
Re: • CY
PA
Actig: Teken
Nola
193
DESKBY 251200Z
TO IMMEDIATE F.C.O TELNO.BTC 61 OF 25 JULY 78,
INFO D.0.1 (FOR LIPPITT, EPT1), D.O.T (FOR CRE4), PEKING.
་
YOUR TELNO.BTC 52: HONG KONG COAL DEAL.
See (194)
1. ! DELIVERED LIPPITT'S LETTER AND THE DRAFT OF YOUR MEMORANDUM
FOR THE CHINESE TO KADOORIE THIS MORNING. SIDNEY GORDON AND
STONES WERE PRESENT.
2. ALTHOUGH HE HAS NOT YET HAD TIME TO CONSIDER THE IMPLICATIONS
OF THE POINTS IN THE COVERING LETTER HE EXPRESSED DISMAY THAT THE
DRAFT MEMORANDUM GAVE PRECEDENCE TO SALES OF COAL MACHINERY AND
ANCILLARY EQUIPMENT OVER HIS OWN SCHEMES FOR RURAL ELECTRIFICATION
AN ELECTRICITY TRANSMISSION SYSTEM AND THE SUPPLY OF ELECTRICITY TO KWANGTUNG.
3. I EXPLAINED THAT WE HAD SOUGHT TO LINK OUR DRAFT MEMORANDUM
TO CARLIER MINISTERIAL DISCUSSIONS WITH THE CHINESE AND TO RECENT
HINTS THAT THE CHINESE MIGHT BE ATTACHING PRIORITY TO AN EXCHANGE OF COAL FOR COAL MINING EQUIPMENT (PEKING TELNO.INDUS 19 OF 17
JULY REFERS) KADOORIE REACTED STRONGLY. HE SAID THAT THIS WAS
IN DIRECT CONTRADICTION TO THE EXPRESS INSTRUCTIONS WHICH HE HAD
GIVEN TO DEWE MATHEWS IN A TELEPHONE CONVERSATION ON JULY 17 AND
THAT IF WE DID NOT AFFORD PRIORITY TO HIS SUGGESTIONS, HE COULD
NOT ACCEPT OUR DRAFT AND WOULD WIND UP THE WHOLE IDEA OF A
COMPENSATORY DEAL FOR KESCO'S COAL PURCHASES- I SAID THAT I WAS
NOT AWARE OF THE INSTRUCTIONS GIVEN TO DEWE MATHEWS BUT I WAS SURE THAT IT HAD NOT BEEN THE INTENTION OF THE D.0.1 TO IGNORE
AFTER MUCH DISCUSSION SIDNEY
HIS INSISTENCE ON THIS POINT.
GORDONN, IN A HELPFUL ATTEMPT AT A COMPROMISE, SUGGESTED THAT PARAS
OF THE MEMORANDUM SHOULD BECOME PARA.2 IN ORDER TO MEET SIR LAWRENCE'S POINT. KADOOR'E FINALLY AGREED TO ACCEPT THIS AND
I SAID THAT I WOULD COMMEND IT TO LONDON.
CONFIDENTIAL
/ 4. I SUSPECT
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