CONFIDENTIAL

Background

1.

The Bill is now progressing fast through Congress. Following further lobbying by Solomon, the requirement for annual reports on JD implementation has now been dropped and

replaced by a call for less frequent reports on conditions

in Hong Kong of interest to the US (including democracy).

(Washington Telno 1017)

We

2. As Peking say (their telno 645, which we will respond

to) this change will not cut much ice with the Chinese.

(and the US Administration) will need to go on encouraging

them not to damage their more significant interests by

blowing this one out of proportion.

JH2AET/2

CONFIDENTIAL

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