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qc/ Mr Broadbent (Kconomists)
FROM:
Gratefure for any
DATE:
quick thoughts
3074
Sir J Coles
CHINA: MFN STATUS
A R Paul
Muz 09014
Hong Kong Department
30 April 1991
CC:
Mr Burns
Mr Davies, FED
Mr Burns, NAD
Mr Bone, ERD
1. Your minute of 29 April to Mr Davies (FED) asked for a note on the present situation as a basis for discussing what
action we should take with the US Administration and perhaps
others, and whether there are ways to shield Hong Kong from
a US decision not to renew MFN status for China.
A 2. At annex A I attach a summary of the serious effects the
Hong Kong Government judges China's loss of MFN status would
have on Hong Kong trade over 40,000 jobs could be lost, GDP
growth could be curtailed by up to one third, and over 40%
or US$4.6 billion worth of Hong Kong's reexports from China
to the US could be lost.
3. The prospects this year for renewal are worse than least
year.
-
the bilateral trade deficit with China has expanded enormously, according to US calculations, reaching
US$11billion: China now has the third largest bilateral
surplus with the US;
ROZAWM/1
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CC