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6. I EXPLAINED OUR CONCERNS ABOUT PROPOSALS FOR THE TAXATION OF FOREIGN CORPORATIONS. HAMILTON AGREED THAT EVERY GOVERNOR AND MAYOR IN THE U.S. WAS TRYING TO ATTRACT FOREIGN INVESTMENT AND ANYTHING THAT DETERRED IT WOULD HAVE VERY NEGATIVE EFFECTS ON THE U.S. ECONOMY. HIS COMMITTEE WAS NOT DIRECTLY INVOLVED, BUT HE UNDERSTOOD THE POINTS WE WERE MAKING.
7.
ON CHINA/MFN, I EXPLAINED OUR CONCERNS ABOUT HONG KONG. HAMILTON SAID THAT HE WOULD LIKE TO ARRANGE FOR THE GOVERNOR TO MEET THE FOREIGN AFFAIRS COMMITTEE. THIS WAS AN ISSUE ON WHICH,
IN HIS VIEW, CLINTON NEEDED TO ADOPT A MORE SOPHISTICATED APPROACH. HIS RECENT STATEMENT (MY TELNO 2568) HAD BEEN ENCOURAGING FROM THAT
POINT OF VIEW.
8. I EXPLAINED THAT LIMITING THE WITHDRAWAL OF MFN TO GOODS PRODUCED BY STATE-OWNED ENTERPRISES IN CHINA STILL WOULD HAVE ADVERSE EFFECTS ON HONG KONG. THE GOVERNOR WAS MAKING A COURAGEOUS ATTEMPT TO EXTEND DEMOCRACY IN HONG KONG. HAMILTON SAID THAT HE STRONGLY SUPPORTED THIS. HE AGREED THAT THE NEW ADMINISTRATION NEEDED TO LOOK FOR WAYS OF TRYING TO INCREASE THE PRESSURE ON CHINA OVER HUMAN RIGHTS WITHOUT DEFEATING ITS OWN PURPOSES AND OURS IN
HONG KONG.
COMMENT
9. LEE HAMILTON IS NO LONGER ONE OF THE FRONT-RUNNERS FOR SECRETARY OF STATE, BUT WILL HAVE IMPORTANT INFLUENCE ON THE NEW
ADMINISTRATION.
RENWICK
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