CONFIDENTIAL

FM WASHINGTON

TO ROUTINE FCO

TELNO 2059

X

OF 021416Z AUGUST 89

CONFIDENTIAL

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MKD 09111 calli

TOP COS @

DIST

INFO ROUTINE HONG KONG, PEKING, OTTAWA, CANBERRA, TOKYO

INFO ROUTINE UKREP BRUSSELS INFO SAVING UKMIS NEW YORK

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HONG KONG TELNO 2491: CONFIDENCE-BOOSTING MEASURES: INTERNATIONAL

ASPECTS

1. WE HAVE DISCUSSED THIS WITH PETER LO IN THE HONG KONG GOVERNMENT OFFICE.

2. WE DO NOT HAVE MUCH TO OFFER ON WAYS OF PROMOTING HONG KONG AS

AN INTERNATIONAL CENTRE, BUT GIVEN THE REFERENCES TO UN ASSOCIATED BODIES IN PARA 3 OF TUR, UKMIS NEW YORK MAY BE ABLE TO HELP, AND WE ARE THEREFORE COPYING THE TELEGRAMS TO THEM BY BAG.

3.

THERE ARE OF COURSE ALREADY EXTENSIVE US COMMERCIAL AND FINANCIAL INTERESTS IN HONG KONG, AND A GREAT DEAL OF GOODWILL TOWARDS HONG KONG IN THE AMERICAN POLITICAL AND BUSINESS COMMUNITIES. ON THE COMMERCIAL SIDE, THE HONG KONG OFFICE ARE DISCUSSING WITH THE US COMMERCE DEPARTMENT WAYS OF FURTHER STIMULATING INTEREST IN HONG KONG AMONG US BUSINESSMEN, INCLUDING OFFICIAL TRADE SHOWS, DELEGATIONS OF US BUSINESSMEN TO HONG KONG AND SEMINARS ABOUT HONG KONG IN MAJOR US CITIES.

4. ON THE POLITICAL SIDE, WE HAVE BEEN WORKING HARD TO CHANNEL THE CONCERN ABOUT HONG KONG'S FUTURE WHICH WAS GENERATED BY RECENT

EVENTS IN CHINA INTO CONSTRUCTIVE CHANNELS. WE HAVE AS YOU KNOW

BEEN LOBBYING ON THE HILL TO ENSURE THAT ANY US LEGISLATION ON CHINA SHOULD URGE THE CHINESE TO LIVE UP TO THEIR UNDERTAKINGS IN THE JOINT DECLARATION RATHER THAN CASTING DOUBT ON THE JD'S CREDIBILITY COUR TELNOS 1783 AND 1940). WE HAVE ALSO BEEN MAKING THE POINT THAT

US ECONOMIC SANCTIONS AGAINST CHINA WOULD HAVE A DAMAGING EFFECT ON

HONG KONG,

5. WE SEE EVERY ADVANTAGE IN HONG KONG CULTIVATING CLOSE RELATIONS WITH THE US CONSULATE IN HONG KONG (PARA 8 OF TUR). THE US ADMINISTRATION HAVE IN THE PAST BEEN READY TO MAKE SUPPORTIVE STATEMENTS ABOUT HONG KONG'S FUTURE WHEN WE HAVE INDICATED THAT THESE WOULD BE USEFUL. THEY ARE CONSCIOUS OF THE NEED TO MAINTAIN THE CREDIBILITY OF THEIR POSITION BY NOT SOUNDING

PANGLOSSIAN. AND THEY HAVE CONSIDERED IT WOULD BE MORE USEFUL TO

US FOR THEM TO STAY CAREFULLY ON THE SIDELINES OF OUR NEGOTIATIONS WITH THE CHINESE. BUT GIVEN THOSE CONSTRAINTS, WE BELIEVE THAT THEY

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CONFIDENTIAL

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