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061245

MDHOAN 3051

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back papers. 21/10

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IUP COPY DIST 2

INFO PRIORITY HONG KONG, PEKING, UKREP JLG HONG KONG INFO PRIORITY BTC HONG KONG

30464 CRE

HONG KONG TELNO 3046 THE US/HK POLICY ACT 1991 (THE MCCONNELL BILL)

1.

WE WERE GRATEFUL FOR PATTISON'S LETTER OF 27 SEPTEMBER AND TELELETTER OF 1 OCTOBER.

2. ON THE US REQUEST FOR THE HONG KONG GOVERNMENT'S COMMENTS, SUBJECT TO YOUR VIEWS WE ARE INCLINED TO THINK THAT NEITHER HMG NOR HKG SHOULD OFFER FORMAL OR WRITTEN COMMENT ON THE SUBSTANCE OF A CONGRESSIONAL BILL AND THAT HONG KONG SHOULD LIMIT THEIR COMMENTS TO POINTING OUT ANY DISCREPANCIES IN THE BILL'S REFERENCES TO OR QUOTATIONS FROM THE JOINT DECLARATION.

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Twk.

OUR PRESENT THINKING ON THE SUBSTANCE IS THAT, ALTHOUGH SOME ASPECTS OF THE BILL FIT OUR OBJECTIVES OTHER PROVISIONS ARE LESS WELCOME, EG THE REPORTING REQUIREMENT. THIS OPENS THE PROSPECT OF CONGRESS PASSING MOTIONS UNDER SUCH AN ACT DRAWING ATTENTION TO SOME SUPPOSED SHORTCOMINGS BY HMG IN THE IMPLEMENTATION OF THE JD. CONGRESS MIGHT PICK UP AND PLAY UNHELPFULLY CONTROVERSIAL ALLEGATIONS IN HONG KONG (SUCH AS THE CURRENT SUGGESTION THAT THE AGREEMENT ON THE COURT OF FINAL APPEAL IS IN BREACH OF THE JD). (IT IS THUS REASSURING TO LEARN THAT THE ADMINISTRATION PLAN TO RESIST THIS REQUIREMENT.)

PEKING TELNO 4762 SUGGESTS THAT MCCONNELL'S STAFFERS CAND FREEMAN OF THE ADMINISTRATION) ARE OVER-OPTIMISTIC ABOUT THE LIKELY CHINESE ATTITUDE TO THE ENSHRINEMENT OF THE JOINT DECLARATION. APART FROM THEIR GENERAL CONCERN ABOUT

''INTERNATIONALISATION'' THEY ARE UNLIKELY TO BE KEEN ON THE EMPHASIS WHICH THE BILL PLACES ON HONG KONG'S HIGH DEGREE OF AUTONOMY' AND ON WHAT THE US SHOULD DO TO HELP CEMENT IT IN PLACE. THE CHINESE MAY INTERPRET THIS AS AN ATTEMPT TO LIMIT THE PRC'S RESUMPTION OF SOVEREIGNTY TO DEFENCE AND FOREIGN AFFAIRS MATTERS. WHILE THE ASSERTION THAT ''THE MORE EXTENSIVE AND ESTABLISHED TIES ARE BEFORE 1997, THE MORE LIKELY THAT THEY WILL BE MAINTAINED AFTER 1997 (BOTTOM OF COLUMN 2, S13413) HAS ECHOES OF 'THE THROUGH-TRAIN'' THE CHINESE ARE SENSITIVE (AND SELECTIVE) ABOUT THIS CONCEPT. MORE GENERALLY, BEARING IN MIND

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