TNAG-0841-FCO40-1050-Visit-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-Chi-1979 — Page 138

CONFIDENTIAL # 3

14.

7

As regards the possibility of future

changes in Chinese attitudes, Sir Lawrence said

that, assuming :

(i)

that there was a change of policy

in China and that a new government

should decide not to honour a long-

term supply agreement without which

no money could be raised; and

(ii)

that the demand for electricity

in Hong Kong continued to grow at

the same rate as average over the

last 10 years,

then CLP would be able to use the capacity installed gradually over a period. However, he recognised that there would be a problem if, at the same time, there was a down-turn in the growth rate

in Hong Kong.

15.

Sir Lawrence concluded his presentation by

putting forward a number of points of a political or trade/commercial nature, which he considered of significance to the UK Government and saw as lending

support to his proposal.

16.

Reaction by Mr. Varley to Sir Lawrence's

proposal

It is believed that :

(a)

Mr. Varley's, overt reaction was that

the CLP idea was "fantastic".

He said

it would be looked into when the group

returned to the UK. CLP would be

advised of the outcome in due course;