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SIR Y K PAO'S CALL ON PRIME MINISTER, 10.15 AM TUESDAY 10 JUNE
SINO BRITISH FRIENDSHIP SCHOLARSHIP SCHEME
1 In December last year, the Prime Minister agreed in
principle that the UK would contribute to a scheme to enable more Chinese students to study in Britain which Sir Y K Pao had
proposed to the Prime Minister and Deng Xiaoping. A Memorandum of Understanding (MOU) was negotiated in May with officials of
the Chinese State Education Commission (SEDC) and Mr Stephen Pan
of Sir Y K Pao's London office. This was signed at 10 Downing
Street on 9 June, in the presence of the Prime Minister, and
General Secretary Hu Yaobang, by the Secretary of State, Sir Y K
Pao and Chinese Vice Premier Li Peng (who is concurrently the
Minister in charge of the State Education Commission.
2 The Scheme will cost £35 million (expressed in sterling)
over 10 years.
The Chinese Government and Sir Y K Pao will
each contribute the equivalent of £1.4m pa; we will provide £700,000 pa and, following an approach by Sir Y K Pao to the Prime Minister, the cost of the British Council's management
services. Sir Y K Pao's contribution, which will be provided through a foundation he has established for the purpose, will be channelled to either government as required during each year. In practice, most of the foundation's contribution as well as all of HMG's will be spent in the United Kingdom on fees and related
costs. The scheme will be called the "Sino British Friendship
Scholarship Scheme" (at Sir Y K Pao's suggestion).
3 A Commission which is to be a representational rather than
executive body will oversee the scheme. Each party to the MOU is to be represented by two Commissioners, including Sir Y K Pao himself, who is to be the first Chairman. The practical
administration of the scheme at the UK end will be by the
British Council, who will manage this programme much as they do our conventional training programmes for China.
4
The administrative costs of the British Council (probably around £250,000 pa) were a major difficulty in the negotiations. We had intended that these would be borne from the original UK
contribution of £700,000. However, both the Chinese and
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