RESTRICTED
115213
MDLIA 4614
INTERMINGLING OF ACTIVITIES BETWEEN THE STATE AND PRIVATE SECTORS IN CHINA, IT IS IMPOSSIBLE TO BE CERTAIN WHICH CHINESE EXPORTS WOULD BE CONSIDERED AS ORIGINATING FROM 'STATE-OWNED ENTERPRISES'. MOREOVER, THE CHINESE GOVERNMENT HAS NOT PUBLISHED ANY STATISTICS ON EXPORTS BY STATE-OWNED ENTERPRISES, HOWEVER DEFINED.
4. IN VIEW OF THE ABOVE, WE CANNOT QUANTIFY OR EVEN ATTEMPT A GUESSTIMATE OF THE POSSIBLE DAMAGE THAT MAY BE CAUSED TO HONG KONG BY THE TARGETING PROVISION. NOR ARE WE SURE WHETHER STATE- CONTROLLED CHINESE EXPORTS TO THE US REMAIN MORE VALUABLE THAN PRIVATE SECTOR EXPORTS, ALTHOUGH OUR ECONOMISTS THINK THIS RATHER UNLIKELY.
5. THE ASSISTANT UNITED STATES TRADE REPRESENTATIVE IN RECENT CONGRESSIONAL HEARINGS STATED THAT THE CHINESE GOVERNMENT AT ALL
LEVELS HAS HEAVY INVOLVEMENT IN THE MANUFACTURING AND DISTRIBUTION OF CHINESE PRODUCTS, THAT IT WOULD BE VERY DIFFICULT TO DETERMINE WHICH PRODUCTS ARE FROM STATE-OWNED ENTERPRISES AND THAT THE TWO BILLS ARE, THEREFORE, UNWORKABLE. WE SHARE THIS
VIEW.
PATTEN
YYYY
ΜΑΙΝ
75
.ASIA/PACIFIC ECONOMIC
ERD
ECD (E)
ECONOMIC ADVISERS
FED
HKD
JOINT DIRECTORATE
NAD
PLANNERS
SEAD
ADDITIONAL
5
DTI//HD/EEP MR COOKE
DTI//OT4 MR HAMPTON
DTI//OT2 MR LOVE
HMT//IF MR P SEDGEWICK
NNNN
DISTRIBUTION
80
SPD
PS
PS/MR GOODLAD
PS/MR HOGG
MR CROWE
SIR J COLES
MR BEAMISH
MR HUM
MR BONE
MR MASEFIELD
PAGE
2
RESTRICTED
HMD//IF2 MR S HANKS