CONFIDENTIAL
DRAFT LETTER FROM THE PRIME MINISTER TO LORD KADOORTE
I
On his return from Hong Kong Michael Jopling told me of his conversation with you about the Guangdong nuclear power project, and he mentioned in particular your unease about the Anglo/ American package advocated by the Atomic Energy Authority. attach especial importance to your personal views on this project, and in view of your reported concern I asked for a full assessment on the present situation.
I am very conscious of your consistent advocacy of an Anglo/ French approach, and I myself believe the arguments in favour of working with Framatome remain very strong. However I think you will agree that so far we have had conflicting signals from the Chinese in Peking and Canton about when they intend to go forward with this project, and no definitive statement of their preference on a nuclear island supplier. In these circumstances I believe that it would be wrong for the UK to dismiss the prospect of working with Westinghouse. I know you have reservations about this option, and fear it may be rejected by the Chinese as unproven. 'I fully endorse your views that the UK's first priority must be to meet the requirements of the customer. However, in view of the continuing uncertainties in the situation, I consider it worthwhile for GECK and Westinghouse together to seek to develop a credible alternative proposal. Until Chinese intentions are clearer I believe flexibility must be the keynote in our strategy.
I hope this will help to clarify the UK position. I shall continue to follow developments on the project with interest, and look forward to my visit to Hong Kong later in the year.
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