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R0914

CONFIDENTIAL

Miss Marssen

Wool.

128

SECRETARY OF STATE'S VISIT TO WASHINGTON (AND NEW YORK):

MEETING WITH PRESIDENT BUSH, 11 SEPTEMBER

HONG KONG/CHINA/VIETNAMESE BOAT PEOPLE

Points to Make

CHINA

HKB 040 14

Recent political developments in China do not justify early

relaxation of Western measures. Would be misinterpreted by Chinese leaders and Western public opinion.

But pressure for general trade/economic sanctions must be

resisted.

HONG KONG

Confidence in Hong Kong still bruised.

China has primary responsibility for restoring confidence. Pressing Chinese to take concrete steps eg revising Basic Law.

Doing all we can to rebuild confidence: eg nationality package, Bill of Rights, review of democratisation programme.

Look to United States and other friends for support. Substantial US economic stake in Hong Kong.

United States could help by

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encouraging continued US trade and investment;

publicly stating willingness to help in worst case scenario;

supporting Hong Kong's participation in international economic

organisations eg Asia/Pacific Economic Forum.

CONFIDENTIAL

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