CONFIDENTIAL
BACKGROUND
1..
1
China Light and Power Company (CLP), a Hong Kong
electricity company, is undertaking a joint feasibility
study with the Guangdong Electricity Company (KEC) into
the possible construction of a nuclear power station in
•
the People's Republic of China. The project would largely
be financed by the sale of electricity to Hong Kong.
CLP
are receiving technical advice from the United Kingdom
Atomic Energy Authority and KEC from an American firm of
The feasibility study is considering all
aspects of the siting and construction of a nuclear plant.
It is expected to be completed this year.
consultants.
2.
The Chinese have a clear preference for a Pressurised
Water Reactor (PWR). Since the UK is not in a position to
supply a PWR we are hoping that UK industry will be asked
to provide the non-nuclear equipment with another supplier
providing the nuclear island. While the Chinese might
prefer to buy all the equipment for the station from one
(i) the clear supplier we have two factors in our favour:
(ii) the position of
preference of CLP for UK equipment;
the Hong Kong Government who will need to be satisfied both
We think
on the station's safety and on security of supply.
the Chinese may believe this would depend on a UK share in
the project.
3.
2
Ministers have agreed that the project is worth pursuing
and that there are no overriding non-proliferation objections
to a sale to China. The Chinese have made it clear that they
would not accept safeguards inspection of their nuclear
CONFIDENTIAL
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