TNAG-0950-FCO40-1169-Effect-of-nuclear-exports-to-China-on-Hong-Kong-Guangdong-nu-1980 — Page 153

CONFIDENTIAL

DRAFT PAPER FOR MINISTERS ON THE GUANGDONG NUCLEAR POWER

STATION PROJECT

Purpose of Paper

1. The Secretary of State for Industry informed the Prime Minister and Ministerial colleagues on 25 October, 1979 and 18 February 1980 of talks between the Southern China Province

of Guangdong, the Hong Kong based China Light and Power Company (CLP) and the UK nuclear and power plant industries on the

possible sale of a nuclear power station to China.

2.

3.

Ministers agreed in February, 1980:

that there should be a continuing UK industrial and official involvement in the project;

that technical support should be provided to

CLP (UKAEA was subsequently asked and agreed to take on this task);

a line on non-proliferation.

This paper, which represents the views of DoI, FCO, DOT, Department of Energy, Treasury and ECGD:

a)

b)

Outlines progress since then in discussions with

the Guangdong provincial authorities;

Draws the attention of Ministers to the principal

issues of foreign and industrial policy that are

involved;

c) Seeks Ministerial endorsement of the UK's

Background

4.

continued involvement in the project and approval

of a line to take with the Chinese on the issues

of equity participation, liabilities, the credit package, commercial relationships and the operational

package.

d) h.c.

The Secretary of State's paper of 18 February, 1980 noted the proposal for a nuclear power station which would be constructed on a joint venture basis between China Light and Power Ltd (CLP) and the Guangdong Electricity Co. (KEC) with about half of the output being sold to CLP, thereby generating the foreign exchange to repay foreign loans.

CONFIDENTIAL