Background

THE MCCONNELL BILL

CONFIDENTIAL

A, B

C

U A

D

1.

After a visit to Hong Kong last year, Senator McConnell introduced a Bill designed to bolster Hong Kong's autonomy under the Joint Declaration (JD). The Bill is

well-intentioned, and largely a reiteration of the JD. But it includes more sensitive points, eg a provision for annual reports on JD implementation.

2. The Chinese believe that the McConnell Bill is an

attempt to internationalise Hong Kong. They know that Martin Lee played some part in encouraging Senator McConnell, and this feeds their suspicion of a "British"

conspiracy. Ambassador Ma lobbied Lord Caithness about it

on 10 February and urged HMG to speak out publicly against it. On 22 April the Chinese made a fairly strongly worded demarche to our Ambassador in Peking on the subject (Peking telnos 565 and 566 refer).

3. The Embassy in Washington now expect that the Bill will

become law. But they warn that any public statement would

be damaging with the Administration and could stimulate

further opposition to renewal of the MFN status for China.

It would also expose us to the accusation of kowtowing to the Chinese. We have decided to avoid high-profile lobbying on the Hill but quietly to let the Administration and

trusted congressional contacts know of the points which

concern us. The Ambassador spoke to Congressman Solarz about this over the weekend (Washington telno 873). The Governor also told McConnell on 22 April in Hong Kong that the Chinese had expressed their displeasure at the Bill to

our Ambassador in Peking. McConnell said that he would

amend (or if necessary, omit) the reporting requirements and

JH2ACN/5

CONFIDENTIAL

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