TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 151

CONFIDENTIAL

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DSR 11C

will be given extra weight, and Indian obstructionism at

international meetings on non-proliferation issues will

become still more pronounced and she will have a further

argument to support her continued refusal to accept IAEA

safeguards on some of her nuclear facilities. The sale will

be used by the Soviet Union as a convenient stick with which

to beat us.

7.

On the other hand, the proposed sale raises no issues

of genuine non-proliferation concern. The deal would not

conflict with our formal obligations under the NPT or with

the Nuclear Suppliers Guidelines. China has already

attained a nuclear weapons capability without our help.

None of the equipment or materials to be supplied are

capable of significantly enhancing that capability, even

if it were economically sensible to divert them to military

use. The development of contacts with the Chinese on

nuclear matters will give us an opportunity of encouraging

them to move closer to the international main streams.

if we refuse to supply this power station the French

will certainly step in, so the Chinese will get the

technology anyway.

8.

And

On balance, therefore, it would seem right not to

object to the contract proceeding along the lines currently

envisaged. However, if the US Government eventually

decide to attach to the release of US technology conditions

which it would be impractical for us to fulfil, Ministers

may wish to review the question again.

CONFIDENTIAL