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(A) THEORETICALLY, THE ATTITUDE TO GATT OF THOSE PRESENTL
POWER IN CHINA MIGHT WELL BE TO TRY BINDING THEIR SUCCESS-
ORS TO CURRENT ECONOMIC POLICIES BY EXTERNAL INSTITUTIONAL
COMMITMENTS,
(B) REAL CHANGE IN CHINESE ECONOMIC POLICIES AND PRACTICES
WAS LIKELY TO TAKE A LONG TIME TO COME ABOUT AND THE PRO-
CESS WAS UNLIKELY TO BE SMOOTH PARTLY BECAUSE OF DIFFERENT
IDEAS AT DIFFERENT LEVELS OF THE CHINESE BUREAUCRACY AND
PARTLY BECAUSE OF AD HOC REACTIONS TO THE MANY QUESTIONS,
IMPLICATIONS AND PROBLEMS THAT HAD NOT BEEN ANTICIPATED
OR FULLY APPRECIATED. THE TREND WAS IN GENERAL MORE PRAG-
MATIC AND LESS DOGMATIC BUT THE PROCESS WAS GRADUAL AND
EVOLUTIONARY,
(C) WHILST (A) ABOVE MIGHT BE SEEN BY SOME AS AN ARGUMENT FOR
ENCOURAGING CHINA'S EARLY RETURN' TO GATT, (B) ABOVE
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MIGHT BE SEEN BY OTHERS AS A REASON FOR MAINTAINING LONGER
TERM PRESSURE AND NOT BEING RUSHED INTO WAIVING ENTRY RE-
QUIREMENTS IN A WAY THAT MIGHT ULTIMATELY SERVE TO UNDER-
MINE THE GATT ITSELF.
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4. MURPHY LEFT THE CLEAR IMPRESSION THAT THE U.S. WOULD CONTINUE
TO TAKE A FIRM LINE ON CHINESE ACCESSION IF FOR INSTANCE
THE CHINESE TRIED TO OBTAIN STATUS BY JOINING THE CODES ONE
BY ONE THEY WOULD SIMPLY BE MET WITH 'NON-APPLICATION' BY THE
U.S. IN EACH CASE. MURPHY'S CONCERN SEEMED TO CENTRE ON THE
FACT THAT THE UNITED STATES MIGHT BE THE ONLY ONE TO TAKE SUCH
A FIRM LINE AND HE SEEMED TO BE LOOKING FOR ARGUMENTS, INFORM-
ATION AND REASSURANCE TO SUPPORT THAT LINE.
POINTS OF PURELY BILATERAL INTEREST ON TEXTILES ETC WILL BE
REPORTED SEPARATELY. THIS MESSAGE HAS BEEN COPIED TO MONT-
GOMERY (UKMIS),
ENDS