BACKGROUND
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1. In their proposals for COCOM reforms in the light of the changing strategic situation following the break up of the Soviet Union, the Americans are proposing that, during routine reviews of the Industrial List, the current preferential treatment for China should be eliminated by establishing better treatment for the Republics of the
former Soviet Union.
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2. China currently benefits from the "Green Line" which allows it preferential treatment in a number of areas. The Core List exercise to some extent eroded this differential and in some cases introduced an even greater relaxation: in the latter cases China has generally been allowed to benefit from that relaxation. The US proposal will reverse this. As we know their proposal is dicatated by political, not strategic considerations; and as such it should not be admitted by COCOM. Additionally, it is contrary to our interest, on behalf of Hong Kong, in seeing controls for China progressively erode: this will help to minimise
чи difficulties faced by Hong Kong in the run up to 1997, as other COCOM members progressively see it as part of China and control exports accordingly.
3. US political interests have held sway in COCOM in the past (eg Cuba, Afghanistan, Vietnam), In this instance the Americans are likely to argue that China's non-proliferation record warrants this action, and that it is acceptable since it does not constitute a roll-back. We should contest this on strategic grounds, but should not insist if we have no
support.
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