TNAG-1059-FCO40-1309-Guangdong-nuclear-power-station-project-1981 — Page 51

CODE 18.77

Mr Williamson

Mr Clift

CONFIDENTIAL

Langon J.

2.11

3/11 Thank you

GUANGDONG NUCLEAR PROJECT

Reference...

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1. Mr Clift asked for a note on where things stand for his strategy group meeting with Mr Stones next week.

Feasibility Study

2. There is no sign of an imminent decision from the Chinese. Peter Thomson learned from Lu Ying's interpreter that deliber- ations would go on at least until the New Year, while Ji Chongwei of the Import/Export Commission recently told the Embassy there were conflicting schools of thought on whether priority should be given to a nuclear project. A decision will need to be reached for China's next 5-year plan, now under preparation.

Reactor supplier

3. The signs are as murky as ever on which supplier the Chinese might prefer. Ji Chongwei had no hesitation in telling the Embassy that China favoured the French. This contrasts with what Lu Ying told Thomson at around the same time, that we should get it out of our heads that the French had an inside track. He said they had spoken of favourable terms, but not yet spelt them out.

Westinghouse

4.

We still give an edge to the French option, but are cult- ivating Westinghouse. The DOI had a meeting with them in September to look into a possible UK/US package. The last strategy group meeting decided not to discourage Lord Kadoorie from hearing a presentation from Westinghouse, and this took place, with Dr Marshall's involvement, during Lord Kadoorie's recent visit. The DOI will arrange for a repeat performance for Mr Stones.

Bechtel

5.

Collaboration with Westinghouse would probably mean a role for Bechtel. The DOI are concerned at the way they are carving out a niche for themselves with the Chinese. They recently made presentations in China, recommending splitting the project into small packages, which would not suit us at all. According to Derek March, they were well received in Canton, but Peking's reception was more cautious.

CONFIDENTIAL

/Visits to Peking