RESTRICTED

FM WASHINGTON

TO PRIORITY FCO

TELNO 237

HKD 021/2

RESTRICTED

RECEIVER IN REGISTRY

13 FEB 1992

DFSK OFFICES

OF 03235OZ FEBRUARY 92

7412. ZB.

In Monis 4

ли

ГОР СОРУ Q DIST?

061075

MDLIAN 1556

Enter

Malz

INFO ROUTINE HONG KONG, UKREP JLG HONG KONG, BTC HONG KONG, PEKING

2

YOUR TELNO 130: THE US/HK POLICY ACT 1991 (THE MCCONNELL BILL)

SUMMARY

1. THE BILL IS SLOWLY GATHERING MOMENTUM. THE FIRST HEARINGS ARE LIKELY IN THE SECOND HALF OF FEBRUARY. THE ADMINISTRATION WILL TALK TO MCCONNELL'S STAFF TO TRY TO REMOVE THE REQUIREMENT FOR A REGULAR REPORT ON THE JOINT DECLARATION. THEY BELIEVE MCCONNELL WILL COOPERATE.

DETAIL

2.

ALTHOUGH THE MCCONNELL BILL ATTRACTED LITTLE ATTENTION WHEN IT WAS FIRST INTRODUCED, THERE HAVE BEEN RECENT SIGNS THAT IT IS GATHERING MOMENTUM. HILL STAFFERS HAVE TOLD US THAT MANY CONGRESSMEN ARE LIKELY TO FAVOUR THE BILL AS A HARMLESS WAY OF KEEPING CONGRESS'S ATTENTION FOCUSSED ON HONG KONG, AND THERE IS THEREFORE A GOOD CHANCE OF ITS BEING ADOPTED SOME TIME THIS YEAR. BUT, GIVEN OTHER PRIORITIES IN THE LEGISLATIVE TIMETABLE, PROGRESS IS LIKELY TO BE SLOW. THE HOUSE EAST ASIAN PACIFIC SUB-COMMITTEE WILL HOLD THE FIRST HEARING ON IT SHORTLY AFTER THE FEBRUARY RECESS (8-17 FEBRUARY).

3

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THE ADMINISTRATION THINK THAT, ALTHOUGH THE BILL HAS A NUMBER OF MINOR FLAWS, IT WILL BE DIFFICULT TO OPPOSE OUTRIGHT. THEY WANT TO WORK WITH MCCONNELL TO IMPROVE THE TEXT. IN PARTICULAR THEY WANT TO REMOVE THE REQUIREMENT FOR REGULAR REPORTING BY THE ADMINISTRATION ON THE IMPLEMENTATION OF THE JOINT DECLARATION WHICH THEY KNOW INFURIATES THE CHINESE, AND WHICH RISKS SETTING THE ADMINISTRATION UP AS THE ARBITER OF THE JD. THEY ARE THINKING OF SUGGESTING TO MCCONNELL INSTEAD THAT THE ADMINISTRATION AGREE TO REPORT IN GENERAL TERMS ON ECONOMIC AND SOCIAL CONDITIONS IN HONG KONG, RATHER THAN SPECIFICALLY ON THE JD. THEY ARE FAIRLY CONFIDENT THAT MCCONNELL A REPUBLICAN WHO DOES NOT WANT TO USE THE BILL TO EMBARRASS THE ADMINISTRATION WILL BE COOPERATIVE.

4.

INCIDENTALLY, THE ADMINISTRATION, LIKE THE CHINESE, ARE PRIVATELY CONVINCED THAT THE BILL OWES A LOT TO MARTIN LEE, WHO

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