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APPLY TO CHINA BY NAME, OR TO "STATES," "COUNTRIES," OR SIMILAR

TERMS. THESE STATUTES, WHICH INCLUDE THE JACKSON-VANIK

PROVISIONS AND THE CURRENT CHINA SANCTIONS LEGISLATION, COULD

REQUIRE THE IMPOSITION ON HONG KONG OF RESTRICTIONS AND

DISABILITIES THAT WOULD BE INCONSISTENT WITH OUR DESIRE TO

RESPECT HONG KONG'S PROMISED AUTONOMY.

WE THEREFORE WOULD WELCOME A BILL THAT ESTABLISHES CLEARLY

THE AUTHORITY OF THE UNITED STATES GOVERNMENT TO TREAT HONG

KONG, WHERE APPROPRIATE, AS A NON-SOVEREIGN ENTITY WHICH IS

DISTINCT FROM THE PRC FOR PURPOSES OF U.S. DOMESTIC LAW. SUCH

A BILL WOULD BE IN FULL KEEPING WITH OUR INTENT AS ONE OF HONG

KONG'S MAJOR PARTNERS TO ASSIST THE U.K. AND CHINA IN ACHIEVING

THE GOALS OF THE JOINT DECLARATION.

ON THE QUESTION OF REPORTS, WE RECOGNIZE CONGRESS'

LEGITIMATE INTEREST IN DEVELOPMENTS IN HONG KONG AS THE

TRANSITION PROGRESSES. INDEED, IT IS OUR INTENTION TO CLOSELY

MONITOR ALL ASPECTS OF THE TRANSITION PROCESS. HOWEVER, WE

BELIEVE ANY FORMAL REPORTING WOULD BEST FOCUS ON U.S. INTERESTS

IN HONG KONG AND CHANGES WHICH RESULT FROM THE TERRITORY'S

REVERSION TO CHINESE SOVEREIGNTY THAT MAY AFFECT OUR

INTERESTS. LET ME POINT OUT THAT THERE ARE MANY POSSIBLE

CHANGES RESULTING FROM HONG KONG'S REVERSION TO THE PRC OF

CONCERN TO U.S. INTERESTS WHICH GO BEYOND THE SCOPE OF THE 1984

WE ASSUME THAT CONGRESS WOULD WANT US TO

JOINT DECLARATION.

REPORT ON SUCH MATTERS.

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