AKK 166/1
TOP CORY RECEIVED IN REGISTRY NO. 51
19 AUG 1980
CONFIDENTIAL 345 7" CONFIDENTIAL
FM HONG KONG 151815Z AUG
OFICER
(AMENDED DISTRI BUTI ONNÉE, AUGUST 1980)
1980
مل
TO PRIORITY FOREIGN AND COMMONWEALTH OFFICE
TELEGRAM NUMBER 1824 OF 15 AUGUST,
INFO PEKING, DEPARTMENT OF INDUSTRY AND DEPARTMENT OF TRADE.
YOUR TELNO 49 TO BTC HONG KONG: GUANGDON NUCLEAR POWER STATION
1. FROM THE WORDING OF THE REF TELEGRAM I AM NOT SURE IF THE
INTRINSIC IMPORTANCE OF THIS PROJECT, THE DEFINITIVE NATURE OF THE DISCUSSIONS THAT MUST TAKE PLACE ON IT THIS AUTUMN, AND THE
CONSEQUENT CONNECTION IN TIME WITH THE SECRETARY OF STATE'S
VISIT ARE FULLY REALISED.
REGISTRY Action Taken
AW 9/1
Seze (96
2. WHEN THE PROJECT WAS FIRST RAISED BY THE CHINESE 18 MONTHS
AGO I WAS EXTREMELY SCEPTICAL, BUT CHINESE COMMITMENT TO THE
PROJECT - PROVIDED THE TERMS ARE RIGHT - IS NO LONGER AT ISSUE.
A STRIKING OPPORTUNITY THEREFORE EXISTS. IN PURELY COMMERCIAL
TERMS IT COULD BE THE BIGGEST SINO/BRITISH VENTURE AT LEAST SINCE THE REVOLUTION, AND IT WOULD HAVE SIGNIFICANT IMPLICATIONS FOR U.K. TRADE IN CHINA AND GENERALLY IN THIS AREA. A TRIANGULAR SINO/BRITISH/HONG KONG VENTURE OF SUCH PROPORTIONS WOULD IN ITSELF HAVE WIDE POLITICAL IMPLICATIONS BUT ADDED SIGNIFICANCE WOULD BE READ INTO IT (RIGHTLY OR WRONGLY) FROM THE FACT THAT THE REPAYMENT OF THE FOREIGN EXCHANGE CONTENT BY KEC ITSELF WOULD DEPEND BOTH ON SALES TO HONG KONG AND ON HONG KONG REMAINING OUTSIDE THE RENMINBI AREA
AT LEAST UNTIL 2005.
3. ON THE OTHER HAND CONSIDERATION OF THIS PROJECT HAS ALREADY
GONE QUITE FAR. KADOORIE HAS RECEIVED ENCOURAGEMENT (OF WHICH THE
CHINESE WILL BE AWARE) AT A HIGH POLITICAL LEVEL IN THE U.K., AND
H.M.G. HAVE PROVIDED VERY STRONG OFFICIAL SUPPORT TO THE CLP
TEAM. SO TO BACK AWAY NOW WOULD BE INTERPRETED AS A DELIBERATE
ACT OF DISINTEREST WITH, I BELIEVE, BAD EFFECTS.
4. AS I UNDERSTAND THE POSITION FROM SIR SIDNEY GORDON, WHILE TECHNICAL STUDIES ARE PROCEEDING AND SHOULD BE COMPLETED THIS
AUTUMN, FINANCIAL STUDIES CONDUCTED IN PARALLEL HAVE THROWN UP THE IMPORTANCE THE CHINESE AUTHORITIES APPEAR TO ATTACH TO
AN EQUITY HOLDING BY H.M.G. AND BY HONG KONG INTERESTS. WHILE
THE OBJECT MAY BE TO SAVE FOREIGN EXCHANGE OUTLAY, IT MAY ALSO GENUINELY BE THAT THEY SEE ADVANTAGE IN A JOINT SINO/BRITISH
PROJECT INVOLVING HONG KONG. HOWEVER THIS MAY BE THE ISSUE
MUST BE DISPOSED OF ONE WAY OR ANOTHER VERY SOON. WHILE AN
INDICATION OF HMG'S POSITION MUST BE EVADED AT THE NEXT MEETING
WITH THE CHINESE ON 25 AUGUST, IT WOULD BE RISKY TO ATTEMPT TO
DO SO AT THE FOLLOWING MEETING IN EARLY OCTOBER AND PROBABLY DISASTROUS TO FAIL TO GO FIRM BY EARLY NOVEMBER, BY WHICH TIME WE UNDERSTAND THE FULL FEASIBILITY STUDY SHOULD BE READY. THERE
ARE OF COURSE MANY WILLING COMPETITORS IN THE WINGS WITH MORE
EXPERIENCE OF PWR'S THAN THE U.K.
CONFIDENTIAL
99
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