TNAG-1058-FCO40-1308-Guangdong-nuclear-power-station-project-1981 — Page 52

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between the French and the Chinese at the political level. He had of course seen newspaper reports. (M Esper interjected : "But have you talked to the interpreter ?" Could M Esper elucidate his point about not pressing the Chinese to chose Guangdong. M Esper said he had simply meant that the French could and would ask the Chinese about their intentions, but they could not press for Guangdong.

13. Mr Manzie hoped that the timing of a Chinese decision on whether and how to proceed in Guangdong would emerge from the continuing discussions between CLP and KEC. He agreed that there might be a case for a joint approach even if the Chinese decided against a negotiated contract. Mr Benjamin asked whether there would be any French objection to the UK

telling the Chinese at some point that there was a poss- ibility of a Franco-British proposal. M Esper reiterated that the Chinese had promised the French that they would be given the first nuclear power station contract in China. The French could not press for one particular site. Shanghai officials were no doubt arguing that it made more sense to proceed in Shanghai than in Guangdong. But this did not rule out a joint Franco-British proposal for Guangdong. The French government had certainly not told French industry to give priority to Shanghai. Indeed, they were aware that French industry was devoting much more attention to Guangdong than to Shanghai. M OuvrieU added that French industry were convinced that Guangdong would be first but the French government were more

cautious.

14. Mr Manley asked whether the French government's position meant that they would not be able to approve any agreement reached between GEC and Framatome until the Chinese government had reached a decision about the siting of the first power station. M Esper replied that any agreement reached now would apply if the Chinese chose Guangdong but not if they chose Shanghai.

15. Referring to M Esper's remarks about the French need to satisfy Alsthom, Mr Manzie said that the UK needed to consider British firms' interest in supplying the balance of nuclear plant (BONP). There was also a British interest in supplying fuel;

the Hong Kong government would have to have confidence in the security of fuel supply and this indicated dual sourcing. Mr Manzie then referred to M Esper's statement that a joint GEC/Framatome bid would still be possible even if there was not a negotiated contract. Would this preclude an alternative all-French bid involving Alsthom ? M Esper explained that he had merely been referring to the possibility of sub-contracting since this was being discussed by the firms. It was in that context that he had mentioned the French wish to do something for Alsthom. But the client must decide. The best solution for the customer (and for the French) might be a deal under which all the nuclear equipment was supplied by Framatome and all the conventional equipment by a second partner (which might be GEC since they had a "trump card"). However, if GEC and Framatome saw advantage in sub-contracting, and if this