TNAG-1497-FCO40-2055-Guangdong-nuclear-power-station-project-at-Daya-Bay-safety-c-1986 — Page 331

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FM PEKING

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AND TO DESKBY 14143OZ FCO

INFO PRIORITY BTC HONG KONG

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RECEIVED IN REGISTRY

06 JAN1986

DESK OFFICER

REGISTRY

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FOR DUTY OFFICER TO PASS TO DOBBIE MEE4

7) MIPT: GUANGDONG MUCLEAR PROJECT

INDEX

PA

1. AT CONCLUSION OF TODAY'S DISCUSSIONS WITH BOC WE AGREED

TO REPORT THE DIFFERENCE ON PREMIUM SET OUT IN MIPT TO MINISTERS FOR INSTRUCTIONS, WHILST MAKING CLEAR THAT WE DOUBTED THAT ANY CHANGE WOULD BE POSSIBLE.

2. THE OPTIONS APPEAR TO BE:

Action Taken

(A) TO STAND FIRM ON THE ARGUMENT THAT WE HAVE MADE THE OFFER WHICH MINISTERS MANDATED US TO MAKE TO ACHIEVE COMPARABILITY WITH

THE FRENCH.

(3) TO MAKE A SMALL FURTHER CONCESSION IN THE HOPE OF REACHING

AGREEMENT.

3. OUR RECOMMENDATION IS THAT WE SHOULD STAND FIRM SEMICOLON ALTHOUGH THE AMOUNT OF MONEY AT ISSUE IS SMALL ( ABOUT POUNDS 1.3. AT MOST) WE HAVE MADE CLEAR TO THE CHINESE THAT WE DID NOT COME TO HAGGLE OVER OUR OFFER WHICH WAS A SPECIAL CASE AUTHORIZED BY MINISTERS SEMICOLON THE CHINESE HAVE PRODUCED NO EVENDENCE THAT OUR PREMIUM IS NOT COMPETITIVE WITH THE FRENCH, AND INDEED HAVE HINTED THAT WE ARE BEING PRESSED NOT BECAUSE OF OUR PREMIUM LEVEL BUT BECAUSE OF THE GEC PRICE.

4. WE SHOULD THEREFORE BE GRATEFUL IF YOU WOULD SEEK THE SECRETARY OF STATE'S AGREEMENT TO AUTHORIZE US TO SAY THAT WE HAVE REPORTED THE POSITION TO MINISTERS SEMICOLON THAT THEY WERE VERY DIS- APPOINTED WITH THE BOC'S RESPONSE TO THE UNIQUE OFFER WHICH THEY APPROVED SEMICOLON THAT THEY HAD RESPONDED TO VICE PREMIER LI PENG'S REQUEST THAT WE SHOULD MATCH THE FRENCH WITH THE OFFER NOW MADE, WHICH THEY BELIEVE FULLY DISCHARGED THE UK'S RESPONSIBILITIES IN THIS AREA SEMICOLON THIS CONCESSION HAD BEEN MADE AS THE LAST IN A LONG LINE OF IMPROVEMENTS TO THE LOAN TERMS SEMICOLON THEY COULD SEE NO GROUNDS FOR IMPROVING THE OFFER MADE, UNLESS THE CHINESE SIDE COULD PRODUCE CONVINCING EVIDENCE THAT THE UK HAD MISUNDERSTOOD

CONFIDENTIAL

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