TNAG-1594-FCO40-2179-Honk-Kong-leading-personality-Sir-Yue-Kong-Pao--businessman-1987 — Page 32

NINGBO STEELWORKS [Defensive]

[If

We cannot provide an aid grant to support this very large project. pressed.] We have indicated to the Chinese Government that we are willing to

explore other ways of expressing our support on small scale. No response yet.

BACKGROUND

Sir Y K Pao, who comes from Ningbo, is promoting this project (estimated cost

£1 billion). He was told in 1986 by the Prime Minister and other Ministers

that we cannot provide ATP (the minimum grant allowed under OECD concensus

rules would be about £300m). The Embassy told the Chinese this in January,

but said that we might consider funding a small separate project in the region

if it could be done without breaching international obligations. There has

been no response.