TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 147

CONFIDENTIAL

2

DSR 11C

3.

Furthermore, Westinghouse will require US Government

agreement for the supply of their technology to the PRC.

This has not so far been granted and considerable difficultie

are likely when the matter is put to Congress.

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 non-proliferation policy which will result from an

apparent retreat from our long-held position on nuclear

transfers. I recommend :

(a)

(b)

-

that we do not object to the contract on non-

proliferation grounds, but strive for the best

possible set of assurances from the Chinese;

that we press the US government to agree to use

of Westinghouse technology by NNC.

FED, HKGD, TRED agree.

CONFIDENTIAL