CONFIDENTIAL
Conditionality would be very unhelpful for Hong Kong. It would create uncertainty in the minds of businessmen and investors, and could have serious repercussions on Hong Kong's trade and ability to attract
investment.
The Foreign Secretary raised the issue with Mr Baker during his recent visit to Washington. Both the Hong Kong Government and the Embassy in Washington have been lobbying vigorously. The Governor has written to key Senators and Congressmen, and our Ambassador in Washington has taken similar action as regards influential Congressmen.
As the issue remains in the balance and because it is important that President Bush is aware of our views on conditionality, the Foreign Secretary recommends that the Prime Minister should send a message to President Bush as soon as possible. A draft is enclosed.
Private Secretary
CONFIDENTIAL