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MDHIAN 1346

GENERALLY, THEY DISPLAYED CONCERN ABOUT CHINA'S HUMAN RIGHTS RECORD, TRADING PRACTICES AND WEAPONS PROLIFERATION POLICY BUT WERE UNSURE WHETHER MFN WAS THE VEHICLE FOR PURSUING THESE CONCERNS. THE SUB COMMITTEE ALSO HEARD FROM SIX MEMBERS OF CONGRESS WITH A PARTICULAR INTEREST IN THE ISSUE, INCLUDING PELOSI. ALMOST ALL TOOK A HARD LINE ON CONDITIONALITY. THE MOST MODERATE VIEWS WERE

EXPRESSED BY SOLARZ. HE SUPPORTED THE PELOSI BILL, WHICH HE THOUGHT MORE REALISTIC IN ITS CONDITIONS THAN LAST YEAR'S LEGISLATION, BUT NOTED THAT THE CONDITIONS NEEDED TO BE CAREFULLY CRAFTED SO AS TO MINIMISE THE DAMAGE TO HONG KONG.

5. MEANWHILE, THE PRESIDENT HAS BEEN SEEKING CONGRESSIONAL SUPPORT FOR RENEWAL. FOLLOWING A MEETING AT THE WHITE HOUSE ON 12 JUNE, SENATOR COCHRAN SAID THAT HE WAS CONSIDERING TABLING A (NON-BINDING) SENSE OF SENATE RESOLUTION ON CHINA (AS AN ALTERNATIVE TO LEGISLATION IMPOSING CONDITIONS ON RENEWAL).

THE WHITE HOUSE, WHILE CAUTIONING THAT THEY WOULD NEED TO SEE THE TEXT OF THE RESOLUTION, WELCOMED THIS AS A MEANS BY WHICH CONGRESS COULD GIVE EXPRESSION TO ITS CONCERNS ABOUT CHINESE BEHAVIOUR, WITHOUT PUTTING CONDITIONS ON THE EXTENSION ITSELF. SEPARATELY SENATOR BAUCUS HAS CIRCULATED A LETTER TO COLLEAGUES IN WHICH HE CALLS FOR THE ADMINISTRATION TO TAKE ACTION ON A NUMBER OF ISSUES RELATED TO CHINA FIGHT BARRIERS TO MARKET ACCESS, BLOCK MULTILATERAL LOANS UNTIL CHINA'S HUMAN RIGHTS RECORD IMPROVES, PRESS CHINA TO ENTER DISCUSSIONS ON WEAPONS PROLIFERATION, BAN IMPORTS OF PRODUCTS MADE WITH PRISON LABOUR, AND SUPPORT TAIWAN'S ENTRY INTO

THE PURPOSE OF BAUCUS'S LETTER WOULD BE TO OBTAIN AN ADMINISTRATION PROMISE THAT THESE ISSUES WOULD BE ADDRESSED, THEREBY GIVING COVER TO THOSE DEMOCRATS WHO WISH TO SUPPORT THE PRESIDENT IN RENEWING UNCONDITIONALLY MFN STATUS FOR CHINA. THE WHITE HOUSE REACTED MORE STIFFLY TO THE BAUCUS LETTER, REPEATING THAT THE PRESIDENT PREFERRED NO CONDITIONS. BUT THIS

APPROACH AGREEING TO AN AGENDA ON CHINA IN RETURN FOR A CONDITION-FREE RENEWAL OF MFN - COULD PROVE ATTRACTIVE TO THE ADMINISTRATION IF IT BELIEVES IT DOES NOT HAVE THE NECESSARY VOTES IN THE SENATE TO SUSTAIN A VETO.

6. I SPOKE TO SUNUNU ON 13 JUNE TO LET HIM KNOW WHAT ACTION WE WERE TAKING IN SUPPORT OF THE ADMINISTRATION WITH SENATORS AND CONGRESSMEN. HE SAID HE WOULD TELL THE PRESIDENT AND SCOWCROFT, AND WOULD BE READY TO ADVISE ON TIMING AND TARGETING OF A FOLLOW-UP LETTER. SUNUNU SAID THAT THE TIMING OF ACTION ON THE HILL REMAINED UNCLEAR. THE DEBATE WAS GOING SLIGHTLY BETTER THAN HE EXPECTED, BUT THE OUTCOME REMAINED HIGHLY UNCERTAIN. THERE WAS

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