NABAAK

CONFIDENTIAL

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

10-12 SEPTEMBER

HONG KONG/CHINA/VIETNAMESE BOAT PEOPLE

Points to Make

CHINA

-

Recent political developments in China (arrests, executions, crackdown in education sector) 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. Harmful to Chinese people and damaging to Hong Kong.

HONG KONG

Confidence in Hong Kong still bruised.

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

meet Hong Kong concerns.

Doing all we can to rebuild confidence: introduction of Bill of

Rights, review of programme for democratisation and nationality package to encourage key personnel to stay in Hong Kong.

Look to United States and other friends in international

community for support. United States has substantial economic stake

in prosperous, confident Hong Kong.

-

United States Administration could help by

encouraging US firms to continue to invest in territory;

CONFIDENTIAL

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