TNAG-0949-FCO40-1168-Effect-of-nuclear-exports-to-China-on-Hong-Kong-Guangdong-nu-1980 — Page 53

(71)

P.A.

CONFIDENTIAL

НК 16G

1

GPS 482

CONFIDENTIAL

DESKEY 243902Z

FM HONG KONG 250750Z JUL 80

TO IMMEDIATE FCO

TELEGRM NUMBER 936 OF 25 JULY

INFO IMMEDIATE PEKING

INFO ROUTINE HONG KONG GOVT OFFICE LONDON

RECEIVED IN REGISTRY NO. 51

2 8 JUL 1980

DESK OFFICER INDEX

No.

PA

か

REGISTRY

Action

See unn 166

(24) +25 Ex

166/1

GR

se

MYTELNO 855: GUANGDONG NUCLEAR PROJECT. SIR LAWRENCE KADOORIE, CHAIRMAN OF CHINA LIGHT AND POWER { CLP) WILL BE IN LONDON NEXT WEEK AND WILL BE SEEING THE PRIME MINISTER, LORD PRIVY SEAL AND SIR KEITH JOSEPH. HE WILL BE TALKING TO ALL THREE ABOUT CLP'S DISCUSSIONS WITH GUANGDONG ON BUILDING A NUCLEAR POWER STATION THERE WITH AT LEAST 60 PER CENT OF THE OUTPUT GOING

TO HONG KONG.

2. YOU WILL KNOW THE CURRENT STATE OF NEGOTIATIONS BETWEEN CLP AND GUANGDONG FROM BTC TELEGRAMS AND FROM DR MARSHALL, WHO HAS

NOW RETURNED TO THE UK.

3. THERE ARE TWO ASPECTS OF PARTICULAR RELEVANCE TO KADOORIE'S

VISIT:

(A) COMMERCIAL OPPORTUNITIES FOR THE UK: AND

(B) THE POLITICAL IMPLICATIONS. ON (A) THE DISCUSSIONS SO FAR HAVE BEEN GOING IN THE FIGHT DIRECTION. BUT COMPETITIVE PRICES AND ADEQUATE FINANCIAL ARRANGEMENTS ARE CLEARLY GOING TO BE CRUCIAL IF THE UK IS TO GET A GOOD SHARE.

4. ON (B) THERE WOULD BE SUBSTANTIAL POLITICAL BENEFIT FROM A MAJOR JOINT VENTURE OF THIS SORT. IT WOULD NOT ONLY DEMONSTRATE SUCCESSFUL CO-OPERATION BUT ALSO REQUIRE AMORTISATION OF LOANS OVER A LONG PERIOD WITH FOREIGN EXCHANGE EARNED FROM SALES TO HONG KONG. TO ACHIEVE THIS POLITICAL BENEFIT A LONG TERM FINANCIAL PACKAGE WILL BE CRUCIAL (SEE MYTELNO 255, PARA 2- NOT TO PEKING).

5. KADOORIE WILL PRESS THE POLITICAL SIGNIFICANCE OF THE PROJECT

. HE WILL ALMOST CERTAINLY ASK FOR DIRECT HMG PARTICIPATION IN THE SEPARATE COMPANY HE PLANS TO ESTABLISH, TOGETHER WITH THE CHINESE TO OWN AND MANAGE THE NUCLEAR POWER STATION. I ASSUME THAT HMG WILL WISH TO RESERVE THEIR POSITION ON SUCH A PROPOSAL UNTIL THE NEGOTIATIONS ARE FURTHER ADVANCED. BUT I HOPE THAT MINISTERS WILL

CONFIDENTIAL

/BE ABLE