5.

The Governor further asked Senator Mitchell on whether there

was any dispute in giving China one more year to enable her to make

improvements. The Senator replied that as far as he was aware

there was no dispute but it appeared to him that a decision would

need to be made soon. He would have no problem in giving China one

more year and he would not favour unrealistic conditions to be made

on China. The question how was how far the US should go in meeting

her objectives without going over the line.

He thought the

President would have to use the prospect of legislation to good

advantage.

6. The Governor thanked the Senator for being candid with him.

He was grateful for US support for Hong Kong. China always feared

about an international conspiracy against her. He hoped the US

Administration would take Chinese sensitivity into account when

processing the MFN issue.

Nonetheless Hong Kong was an

international city and it is inevitable that other countries would

have an interest on Hong Kong. China would have to realise that

the way she treated Hong Kong before and after 1997 would be seen

by the rest of the World as a touchstone for her emergence as a

full player in the international community.

In reply to a question from Senator Mitchell, the Governor

said that the population of Hong Kong was stabilising at six

million. Our per capita income was second to Japan in Asia and we

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