CONFIDENTIAL
FM FCO
TO IMMEDIATE PEKING
TELNO 542
OF 16160OZ MAY 91
CONFIDENTIAL
INFO IMMEDIATE HONG KONG, WASHINGTON
(74)
85
033745
MDHOAN 3669
TOP COPY Hop Q DIST?
FCO TELNOS 890 TO HONG KONG AND 531: MFN STATUS FOR CHINA: DEMARCHE TO COUNSELLOR LIN ZHIYING, 16 MAY
1. DAVIES (FED) CALLED IN COUNSELLOR LIN ON 16 MAY. HE TOOK THE LINE THAT TACKLING MFN HAD TO BE A JOINT ENDEAVOUR BETWEEN CHINA AND HMG/HKG. WE EXPECTED THE BATTLE TO BE HARDER THIS YEAR, THOUGH LATEST INDICATIONS ABOUT PRESIDENT BUSH'S ATTITUDE WERE POSITIVE. HE EXPLAINED WHAT WE AND HKG HAD BEEN DOING WITH THE US ADMINISTRATIVE AND CONGRESS AND ASKED LIN TO SET OUT WHAT ACTION THE CHINESE WERE TAKING. HE EXPLAINED, DRAWING FROM THE LINE IN FIRST TUR, THAT THE OPEN DISAGREEMENT BETWEEN HMG AND CHINA ON SOME ASPECTS OF HONG KONG WOULD MAKE THE MESSAGE BEING RECEIVED IN THE US LESS EASY TO UNDERSTAND. DAVIES THEN TACKLED THE QUESTION OF HUMAN RIGHTS AND THE NEED
FOR CHINA TO PLAY BY INTERNATIONALLY ACCEPTED RULES IF THEY WERE TO BENEFIT FROM THE OPEN WORLD ECONOMY, ON THE LINES OF SECOND TUR.
2.
LIN REPLIED THAT CHINA HAD ALREADY INDICATED THEIR
APPRECIATION OF OUR EFFORTS TO RENEW MFN LAST YEAR AND HE ADDED
HIS OWN PERSONAL THANKS. HE AGREED THAT THIS SHOULD BE A JOINT EFFORT AND ACKNOWLEDGED THE EFFECT THAT NON-RENEWAL WOULD HAVE ON HONG KONG. BUT HE POINTED OUT THAT THE MFN WAS THE BASIS OF THE TRADE RELATIONSHIP BETWEEN THE US AND CHINA. THE BENEFITS DID NOT SIMPLY FLOW ONE WAY. CHINA HOPED THAT THEIR BILATERAL RELATIONS WITH THE US WOULD IMPROVE BUT THEY WERE PREPARED SHOULD MFN STATUS NOT BE GRANTED. HE NOTED THAT US TRADE, US CONSUMERS AND US INVESTORS WOULD ALL BE AFFECTED IF MFN STATUS WAS NOT RENEWED AND THIS WOULD CLEARLY BE UNDESIRABLE FROM THE US' POINT OF VIEW. IT WOULD ALSO BE UNSETTLING FOR THE FAR EAST REGION MORE WIDELY.
3=
LIN CONTINUED THAT THE US AND CHINA HAD DIFFERENCES IN THEIR SYSTEMS AND IDEOLOGY BUT THESE HAD NOT CAUSED GREAT PROBLEMS FOR OVER TWO DECADES. LIN COMMENTED THAT HE DID NOT SEE ANY LINKAGE BETWEEN THE HUMAN RIGHTS QUESTION AND MFN. HE SAID THAT RENEWAL
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