CONFIDENTIAL
(iii) the Guangdong nuclear project was of great interest to
Hong Kong. It would be of benefit to both China and Hong Kong, and it would necessarily also be a Hong Kong/ British project in which Britain had a stake. He
hoped that this project would be continued.
13. Zhao said that certain projects on which there were contracts with British companies might be affected by cuts. But China and Britain should still explore ways of cooperating in the light of readjustment. China attached great importance to the development of commercial and economic relations with Britain. China regarded Britain as a major trading partner in Western Europe. China would do her best to accommodate British
interests.
14. As for the Guangdong nuclear project, this had the support of the central government. But the feasibility study was still being considered, and certain technical questions had not yet been resolved. Thereafter there was the question
of the supply of equipment. The countries concerned would enter into competition. China hoped that Britain would
offer
favourable terms and participate in the competition.
15. Lord Carrington explained that if there was a British
element in the project, this would assist Hong Kong. Sir P Cradock added that we realised that there was also a French
interest in the proposed reactor type (a pressurised water
reactor), which Britain did not manufacture, The British
Government therefore had in mind a cooperative project between France and Britain and British and French companies were in
touch. Since the project was to pay for itself by the sale
of electricity to Hong Kong, there was a vital Hong Kong interest. If there was British participation in the project, it would be easier for Hong Kong to cooperate.
Zhao said that he
understood this point. Once the feasibility study had been
considered the Chinese and British sides should be in contact
over the purchase of equipment.
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