TNAG-1058-FCO40-1308-Guangdong-nuclear-power-station-project-1981 — Page 11

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CONFIDENTIAL

CHINESE INTENTIONS

3. Chinese Prime Minister told HMA in October that Guangdong

province had delegated authority to pursue proposal and that Chinese government favoured limited nuclear programme. Recent retrenchment measures (including 40% cutback in capital construction) seemed likely to delay project but no confirmation

of this. Chief Secretary of Hong Kong told in Canton on 10 March that provincial authorities had approved feasibility

study and would be submitting to central government.

Time-

table for their consideration uncertain.

recent contacts that Chinese regard credit terms as crucial.

Unless UK can offer comparable terms to what they regard as very favourable French terms, our hopes for share of contract

could be affected. ECGD and Treasury are unhappy about

offering blank cheque, but essential at this stage to put down

marker in general terms.

But clear from

HONG KONG GOVERNMENT POSITION

4. Hong Kong government already rely on China for food and

water and would agree to CLP offtake of electricity from

Guangdong subject to satisfactory assurances on safety and

environmental issues, security of supply and price.

UK POSITION

5. Good prospects for

particularly turbines.

competence seem to have

Guangdong in February

UK suppliers of conventional equipment,

Chinese doubts about GEC's technical

been resolved by presentation in

But UK also interested in fuel supply

(BNFL) and enrichment services (URENCO), both of which have proven international capability.

6. GEC are negotiating 'exclusive' agreement with Framatome

for joint bid for Guangdong. In February 1981 Ministers

endorsed view that best hope of UK involvement lies in

collaboration with French and approved idea of GEC/Framatome

agreement.

CONFIDENTIAL

17.