CONFIDENTIAL

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MDHIAN 277`

ADMINISTRATION IS ABOUT TO CHANGE THE POLICY AND INTRODUCE CONDITIONS ON MEN. THEY ARE LIKELY TO WANT TO DO THIS, IF THEY CAN, BY EXECUTIVE ORDER, COUCHING ANY CONDITIONS IN FAIRLY BROAD TERMS, RATHER THAN BY LEGISLATION WHICH WOULD BE FAR MORE OF A REAL CONSTRAINT AND HENCE MUCH LESS DESIRABLE FROM OUR PERSPECTIVE. WINSTON LORD TOLD ME THAT HE WOULD BE GOING TO PEKING VERY SHORTLY TO TRY TO ENCOURAGE THE CHINESE TO MAKE SOME POSITIVE MOVES ON THE TRADE, HUMAN RIGHTS AND PROLIFERATION ISSUES WHICH MOST CONCERN CONGRESS AND THE ADMINISTRATION: AND TO TELL THEM IN FAIRLY GENERAL TERMS OF THE SORT OF CONDITIONS THAT THE US MIGHT DECIDE TO APPLY.

5. THERE ARE OBVIOUSLY SOME NASTY SNAGS IN ALL OF THIS.

FIRST HAS THE ADMINISTRATION LEFT IT TOO LATE TO GO FOR EXECUTIVE ACTION AND AVOID THE LEGISLATIVE APPROACH? I WAS STRUCK BY THE FACT THAT BOTH ROSTENKOWSKI (CHAIRMAN OF THE HOUSE WAYS AND

MEANS COMMITTEE) AND HAMILTON (CHAIRMAN OF THE HOUSE FOREIGN AFFAIRS COMMITTEE) TOLD ME RATHER DESPAIRINGLY THAT THEY HAD URGED THE ADMINISTRATION TO TAKE THE LEAD AT A MUCH EARLIER STAGE BUT

THEY HAD NOT BEEN HEEDED.

7.

SECOND, THERE IS NO KNOWING WHETHER THE ADMINISTRATION WILL BE ABLE TO PITCH ITS CONDITIONS IN SUCH A WAY THAT IT CAN NUDGE A GRUMBLING CHINA INTO MOVING IN THE RIGHT DIRECTION WITHOUT PUSHING IT SO HARD THAT IT DECIDES TRUCULENTLY TO DIG IN ITS HEELS.

8. THIRD, THERE IS A RATHER DIFFICULT TIMING PROBLEM IN THAT THE DECISION ON MFN, DUE BY JUNE 3, WILL FALL SOME 10 DAYS BEFORE EFFORTS TO ENSURE NORTH KOREA'S ACQUIESCENCE TO THE PROVISIONS OF THE NON PROLIFERATION TREATY COME TO A HEAD. IF IN THE RUN-UP TO THIS CHINA INDICATES THAT IT WILL NOT, OR CANNOT, HELP MOVE NORTH KOREA INTO LINE, THAT WILL PLAY BADLY INTO THE MFN DEBATE IN CONGRESS.

FOURTH, THERE IS SOME FEELING THAT CLINTON IS NOT ONLY CONCERNED NOT TO BE SEEN TO BE DOING ANOTHER U-TURN ON HIS ELECTION CAMPAIGN PROMISES, BUT THAT HE ALSO HARBOURS RATHER VISCERAL HOSTILITY TOWARDS CHINA. THIS IS PERHAPS COMPOUNDED BY THE COMPARATIVE LACK OF EXPERTISE AND EXPERIENCE IN THE WHITE HOUSE ON CHINA ISSUES. RUBIN ASKED ME RATHER ANXIOUSLY AT MY SEPARATE MEETING WITH HIM WHAT I THOUGHT THE PRESIDENT'S VIEWS WERE ON TRADE

WITH CHINA AND INDEED ON POLICY TO CHINA IN GENERAL.

10. FIFTH, THERE IS SIGNIFICANT HOSTILITY TO CHINA IN BOTH THE

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CONFIDENTIAL

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