CONFIDENTIAL
The President of the United States
I was in a Washington last week, I mentioned to both Brent Scoweroft and Larry When we met in Bermuda in March I mentioned]
Eagleberger
concern about MFN status for China because of Hong Kong.
I know that you are already familiar with the arguments.
But as a decision is now imminent, I thought I should
write to you to underline the impact on Hong Kong if
China's MFN status was not renewed or if conditions were
attached to this.
As you know, we are having crucial talks with the
Chinese over Hong Kong's plans for a new airport.
Confidence in Hong Kong is at a low ebb. Non-renewal
would therefore come at a particularly difficult time.
Hong Kong's economy is now inextricably linked with
that of China. More than two thirds of Chinese exports to the United States are routed through Hong Kong. We
estimate that non-renewal of China's MFN would result in
a loss of some 43,000 Hong Kong jobs, a drop of up to
half in Hong Kong current GDP growth and a loss of USD
9-12 billion in trade.
BYDAAI
CONFIDENTIAL