TNAG-0949-FCO40-1168-Effect-of-nuclear-exports-to-China-on-Hong-Kong-Guangdong-nu-1980 — Page 48

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b) the promotion of Chinese investment in Hong Kong, where

leases had been acquired from the Hong Kong Government which the Chinese in theory did not recognise;

c) the establishment of an intergovernmental project which

would be the second largest in China. British Government participation would be of great importance.

He believed that Chinese political ideas were based on Chinese traditional thinking. We might have been over-estimating the extent to which Western ideas had overlaid tradition. There could be an important opportunity here for the UK and Hong Kong.

6. Sir Lawrence therefore hoped that the British Government would be interested in participation in a package involving shares in the sort of Hong Kong company which he had described. He fully understood the industrial policy of the present Government but what he was proposing was different from providing assistance to a depressed development area. Government participation would give HMG a much greater say in the supply of equipment, in particular which country, eg France or the US, supplied the nuclear island. Certainly GEC's chances of business would be greatly improved.

7. Sir Ian Gilmour asked how the talk with Sir Keith Joseph that morning had gone. Sir Lawrence said Sir Keith had been very impressed. He hoped that it would indeed be possible to get a British Government decision fairly quickly because the feasibility study with the Chinese would be completed by October.

8. Sir Ian Gilmour said that he had found Sir Lawrence's remarks extremely interesting. He knew they would be very carefully studied by HMG. We appreciated the political and economic importance of the project.

Distribution:

PS/LPS

PS/Mr Blaker

Sir E Youde

HKGD

JNU

FED

Mr G Manzie, DOI

Mr D M March, BTC HONG KONG

Assistant Political Adviser HONG KONG

CONFIDENTIAL