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specific question some months ago and was, as I recall, given an interim answer pending in part completion of the ATP review. It remains a good question when China, on quite a number of measures, does not live up to our now well-established human rights conditionality (though on

other good governance measures, she performs respectably). Given the Prime Minister's interest in the human rights picture in China, can we really ask the Foreign Secretary advocate continuing ATP to China without a fuller

to

ex amination of the arguments - and these would include the political need for a good and cooperative relationship with China both for Hong Kong and P5 reasons; and (though this is for DTI really) the industrial need to help some of our major contractors who without some assistance in one of the major world markets for big projects could otherwise

the wall compared to their EC/ Japanese competitors. parenthesis I doubt the wisdom of Mr Ireton's reference (in the draft PS letter) to Labour 's interventionist policies; the wording, could be read as anti-Heseltine. Best left to HMT?

In

4.

Another point, which flows from the reference to Hong Kong above - and in a sense contradicts it. I wonder how Ministers will view a recommendation to restart ATP for China while the Chinese continue to be difficult over Hong Kong? Ministers might decide that we must keep the issues quite separate, but they are unlikely to want to decide on a new aid package without at least considering the balance to be drawn.

5.

I recognise that if my concerns were to be reflected in an agreed PS letter, this would involve substantial rewriting. But I do not think that the current drafts are sufficiently comprehensive. Economic purity cannot be the only element in foreign policy.

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