TNAG-2981-FCO40-1473-Guangdong-nuclear-power-station-project-1982 — Page 70

CONFIDENTIAL

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GUANGDONG NUCLEAR PROJECT

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NOTE OF STRATEGY GROUP MEETING, 13 OCTOBER 1982 AT ASHDOWN HOUSE

Department of Industry

Those present:

Mr A G Manzie

Mr A Donald

FCO

Mr AJ Havelock

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Mr K Sedman Mr P Thomson

Mr J Mos8

Mr M Pentecost Mr M Uden

Mrs C E D Bell Mr N R Brice

Mr E J Pointon

Department of Industry ECGD FSED/FCO

Department of Energy EIGD

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Mr Manzie opened the meeting by summarising a letter he had received from the Prime Minister's Office reporting a conversation between the PM's PPS and Lord Weinstock. Lord Weinstock had been asking about the outcome of the PM's meetings in China and, following advice from Mr Manzie, the PM's Office had replied to Lord Weinstock along the lines of the various notes of meetings taken during the PM's visit. The upshot was that the Chinese were tending now to favour the French option. Mr Manzie asked Mr Donald to comment on the current position as he saw it, having been present at the PM's meetings in China.

2

Mr Donald confirmed that the records of meetings received were accurate, and noted that when he had been in China with the then Lord Privy Seal in January of this year, the Chinese Premier had then stated

In a preference for an Anglo/French approach to the project.

Mr Donald's view, the Premier's statements outweighed all contrary or contradictory indications from elsewhere, and due account had to be taken of the Chinese Premier's consistent comments. However, financial terms were all-important; given good terms from the UK and France the Anglo-French option now seemed the best line to pursue. Mr Donald pointed out that the US option presented two difficult problems. Firstly, the Chinese lack of commitment to non-proliferation commitments caused grave concern to the Americans; secondly, the Americans'

On the other attitude to Taiwan was not satisfactory to the Chinese. hand, the French had a proven nuclear track record based on an impressive domestic programme, and French project finance was likely to be more flexible than that of the Americans. Both the French and Chinese were aware of the Hong Kong dimension, which encouraged the Chinese to favour an Anglo-French option. Although there had been hiccups in Sino-French relations, omens were favourable for French participation.

3

Mr Manzie said that the French had invited Li Peng to Paris in the first or second week of November, and Li Peng had accepted the invitation. The French Ministry of Industry had also requested a meeting with the UK side, and, although a further meeting could be seen as a continuation of the existing dialogue, it was significant that the French were requesting an early discussion after the FM's visit.