CONFIDENTIAL

FM HONG KONG

TO IMMEDIATE F CO

TELNO 1739

OF 31103OZ MAY 91

AND TO IMMEDIATE WASHINGTON

CONFIDENTIAL

Whis 0904 MD

- 5 JUN 1991

TOP COPY Q DIST M

INFO IMMEDIATE PEKING, UKREP JLG HONG KONG

124

102422

MDHIAN 9118

PAY

WASHINGTON PLEASE PASS TO HKETO

YOUR TELNO 965 TO WASHINGTON: MFN STATUS FOR CHINA

SUBJECT TO WASHINGTON'S VIEWS, OUR OBJECTIVE MUST BE TO CONTINUE TO WORK TOWARDS UNCONDITIONAL RENEWAL OF MFN THIS YEAR AND TO AVOID GIVING ANY SIGNAL TO THE US ADMINISTRATION OR CONGRESS THAT CONDITIONALITY FOR 1992 WOULD NOT BE DAMAGING TO

HONG KONG.

2.

CONDITIONALITY WOULD CREATE UNCERTAINTY. IT WOULD ACT AS A SERIOUS DISCENTIVE TO BOTH LOCAL AND FOREIGN BUSINESSES AND INVESTORS (MY TELNO 1611) THIS UNCERTAINTY WOULD BE INCREASED IN THE (LIKELY) EVENT OF AN ADVERSE CHINESE REACTION.

WILSON

YYYY

MAIN

47

LIMITED

HKD

NAD

ERD

NEWS D

PS

NNNN

DISTRIBUTION

47

PS/LORD CAITHNESS

MR BAYNE

SIR J COLES

MR BURNS

PAGE 1 CONFIDENTIAL

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