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Senate to ensure that the majority against his veto has been less
than the two thirds necessary to over-ride it.
This year ( Presidential election, a recession) the opposition in Congress is
likely to be even tougher.
4.
Hong Kong is caught in the cross-fire because of the scale of
Chinese exports through Hong Kong to the US. Loss of MFN status
would severely damage this export trade. Conditional renewal would
be almost as bad: because of the uncertainty (would China meet the
conditions?) investment would probably drop dramatically. Hong
Kong could lose up to 40,000 jobs and see its GDP growth halved.
5.
Both we and Hong Kong have therefore campaigned hard for unconditional renewal. The Prime Minister has personally intervened in previous years with the President. We have pointed
out that removing MFN would hurt Hong Kong at least as much as China. This argument has had an impact in Congress.
6.
Hong Kong Telno 1812 reports that the CRC have introduced a
motion supporting unconditional renewal. The UDHK's amendment
(HKTelno 1816) puts the Hong Kong Government on the spot.
If they
vote for it or abstain, it will infuriate the Chinese. If they vote against, it may be misinterpreted by some in Washington as opposition to human rights progress in China.
7.
Hong Kong has always supported unconditional renewal of MFN,
and on balance I agree with the advice from Hong Kong that the
best course will remain consistent and therefore vote against the UD amendment. This is unlikely to affect the vote in Washington: those who will be irritated will be those who are anyway committed to imposing conditions on MFN renewal. An abstention would be taken in Peking as tacit support for the UD's approach of linking
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