TNAG-0949-FCO40-1168-Effect-of-nuclear-exports-to-China-on-Hong-Kong-Guangdong-nu-1980 — Page 161

CONFIDENTIAL

Reference

Mr Morrice

2

Mr Webb

Ms Ritchie

GUANGDONG NUCLEAR POWER PROJECT

1.

HKK 166/1

RECEIVED IN REGISTRY NO. 51 2 1 JUL 1980

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The attached letter of 16 July from asks for our comments on various questions raised by Sir L Kadoorie on the significance of this project, particularly in the political sphere. We will need to move fast in order to include these points in the briefing for Sir Lawrence's calls on Ministers.

2.

In general, I am sure that the Chinese do see considerable political significance in the project. They obviously are keen to emphasise PRC/Hong Kong/UK cooperation. There must be more than symbolic significance in the development of so large a project across the border. Obviously, if it comes off, it will strengthen economic interdependence between Guangdong and Hong Kong.

3.

In all these ways it should be helpful in strengthening the mutual vested interest in Hong Kong's stability. I doubt, however, whether it will provide in itself a solution to the problem of the future of Hong Kong. The fact that the KEC accept 25 years contract and appreciation (ie beyond 1997) is not in itself directly helpful for the question of projects and leases within the New Territories.

4. The significance of the apparent Chinese interest in British Government 'support' for the project is unclear. It needs a good deal further examination, in particular as to whether support really means financial participation.

Please prepare a draft on this in consultation with JNU and FED (the latter should probably receive copies of the papers).

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