CONFIDENTIAL

103470 MDADAN 9081

AND CHINA CAN MAKE PROGRESS ON THE ISSUES BETWEEN THEM WITHOUT DAMAGING THE TRADE RELATIONSHIPS WHICH ARE SO IMPORTANT TO BOTH COUNTRIES.

(9.

DEFENSIVE.

THE GOVERNOR RECEIVED ASSURANCES DURING HIS VISIT TO WASHINGTON THAT HONG KONG'S CONCERNS WOULD BE TAKEN INTO ACCOUNT IN THE US DECISION. THE ADMINISTRATIONS HAS -STATEMENT MAKES IT CLEAR THAT HONG KONG HAS BEEN A

(MAJOR) FACTOR IN US THINKING).

WILL TAN

10. WHAT THE HONG KONG GOVERNMENT WILL DO: WILL CONTINUE TO UNDERLINE TO THE US AND CHINA IN OUR CONTACTS THE IMPORTANCE OF FREE TRADE IN GEENERAL AND MFN RENEWAL IN PARTICULAR.

PATTEN

Х

YYYY

DISTRIBUTION

a

2

ADVANCE

HK POLICY

PS

PS/MR GOODLAD SIR J COLES

MR HUM

HKD//HD FED//HD

LEGAL ADVISERS//MS BROOKS

PS/PM

CAOFF//SIR R BRAITHWAITE (DIO)

NNNN

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