TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 140

CONFIDENTIAL

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2

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Covering SECRET

RECOMMENDATION

4.

Successful conclusion of this contract would lead

to significant export opportunities (up to US $2 billion) for

British companies seeking to participate in the US $5 billion

project. Success here would also provide a foothold in the Chinese market. There would be benefits to long term relations

between UK and PRC and more particularly, between PRC and

Hong Kong, These commercial and political advantages would

outweigh the damage to the credibility of our nonproliferation

policy which will result from an apparent retreat from our long-held position on nuclear transfers, I recommend:

(a)

that we do not object to the contract

on nonproliferation grounds, but strive

for the best possible set of assurances

from the Chinese;

(b)

that we press the US government to agree to

use of Westinghouse technology by NNC and BNFL.

FED, HKGD agree.

The Departments of Energy and Industry have

seen this submission in draft and their comments have been taken

into account.

CONFIDENTIAL Covering SECRET