Mr Millett

Mr Bone

Mr Bayne

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-4 1991

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ASIA-PACIFIC ECONOMIC COOPERATION (APEC):

HONG KONG MEMBERSHIP

1. You will be pleased to know that the way now looks clear for Hong Kong to become a full member of APEC and to participate at the Ministerial meeting to be held in Seoul later this year. China and Taiwan will be admitted to APEC at the same time. I attach copies of Hong Kong telnos 2689, and 2691 which give the immediate background.

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269,0

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2. Hong Kong has been lobbying for participation in APEC ever since the first Ministerial meeting in Canberra in November 1989. The Second Ministerial meeting (Singapore, July 1990) agreed to find ways to allow the "three Chinas" to join APEC at this year's Seoul meeting, or as soon as possible thereafter. Given that Hong Kong enjoys full autonomy in the conduct of its external commercial relations, HMG's agreed policy has been to leave the running on this' to Hong Kong, while supporting its application for membership whenever the opportunity arises.

3.

In fact, the Chinese have never had any fundamental difficulty over Hong Kong's membership of APEC. Rather it has been the problem of finding a suitable form of words to allow Taiwan to join. Even so, Chinese sensitivities have been apparent with regard to both Taiwan and Hong Kong and it is satisfactory to know that any remaining reservations have been

overcome.

4. We have telegraphed Hong Kong expressing our pleasure at the outcome and asking about the likely next steps between now and the Seoul Ministerial meeting.

си

T I Hay-Campbell

Economic Relations Department

WH416 270-2677

CC: Mr Cox HKD

Mr Warren FED

2 September 1991

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