TNAG-0948-FCO40-1167-Effect-of-nuclear-exports-to-China-on-Hong-Kong-Guangdong-nu-1980 — Page 131

CONFIDENTIAL

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Sir Keith Joseph Secretary of Statɩ

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Lord Bridges

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14 March 1980

GUANGDONG NUCLEAR POWER STATION, PEOPLE'S REPUBLIC OF CHINA

In your letter to Peter Carrington of 18 Feburary, you sought agreement to the UK continuing a close involvement with the Guangdong nuclear power project in the hope of obtaining power plant orders worth up to

£380 million.

I was aware at the time of Chairman Hua's visit last October that the UK nuclear and power plant industries had been exploring the possibility of Guangdong purchasing a nuclear power station and that the latter had expressed interest in both the Magnox and the PUR. The officials' paper enclosed with your letter shows however that there is now a clear preference for the PWR. For this reason and others mentioned in the paper, there can be no certainty that the UK will secure orders for even part of the project, since we shall be dependent on a satisfactory collaboration with a PWR supplier country. Nevertheless, given the potential value of the work to the UK, I share your view that we should continue our efforts at both industrial and official level to obtain for this country as much of the business as possible.

I agree with the recommended line set out in the paper, subject to the following points being taken into account:

(a).

Non-proliferation assurances: the wording of paragraph 13(a) should be understood as meaning that we would in due course need assurances from the Chinese on physical protection arrangements and retransfers; also that any equipment or materials supplied from the UK would not be diverted to a military use.