CONFIDENTIAL

CONFIDENTIAL

FM WASHINGTON

TO IMMEDIATE FCO

TELNO 998

OF 03214OZ MAY 93

INFO IMMEDIATE HONG KONG, PEKING, ACTOR

TOP COPY Q DIST?

026041

MDHIAN 9530

MEN

HONG KONG : PERSONAL FOR ACTING GOVERNOR

GOVERNOR OF HONG KONG'S CALL ON PRESIDENT CLINTON

1. THE GOVERNOR OF HONG KONG AND I CALLED ON THE PRESIDENT AND

VICE PRESIDENT AT THE WHITE HOUSE TODAY. THE GOVERNOR EXPLAINED HIS DEMOCRATIC REFORMS AND THE CHINESE REACTIONS. THE PRESIDENT EXPRESSED STRONG SUPPORT, BOTH PUBLICLY AND PRIVATELY.

2.

ON MFN, THE GOVERNOR SAID THAT HE WOULD HAVE TO GO ON ARGUING

STRONGLY FOR RENEWAL. THIS WAS VERY IMPORTANT TO THE DEVELOPMENT OF THE CHINESE ECONOMY AND, THEREFORE, TO HONG KONG. THE FREEING-UP OF THE CHINESE ECONOMY WAS LIKELY TO LEAD TO POLITICAL CHANGE OVER TIME. U.S./CHINESE TRADE WAS VITAL TO HONG KONG.

ATTEMPTS LIKE THOSE IN THE CONGRESSIONAL LEGISLATION TO DISTINGUISH BETWEEN THE PRODUCTS OF STATE-OWNED AND PRIVATE ENTERPRISE IN CHINA PROBABLY WERE UNWORKABLE.

PRESIDENT CLINTON SAID THAT HE ACCEPTED MANY OF THESE POINTS.

BUT THERE WERE STRONG FEELINGS IN CONGRESS ON THIS ISSUE AND IT WAS

NOT ONE ON WHICH HE COULD AFFORD TO HAVE A ROW WITH THE DEMOCRATIC

CONGRESSIONAL LEADERS. NOR WERE THE AMERICANS SIMPLY BEING NAIVE. THERE WERE SERIOUS CONCERNS ABOUT HUMAN RIGHTS IN CHINA AND ALSO

ABOUT THE CHINESE PERFORMANCE OVER NON-PROLIFERATION.

4.

MR PATTEN SAID THAT IF THE PRESIDENT CONCLUDED THAT MEN SHOULD NOT BE RENEWED UNCONDITIONALLY, IT WOULD BE EXTREMELY IMPORTANT TO HONG KONG THAT A DECISION SHOULD, IF POSSIBLE, BE DEFERRED TO ALLOW THE CHINESE MORE TIME TO MOVE IN THE RIGHT DIRECTION, THAT CONDITIONS SHOULD NOT BE IMPOSSIBLE FOR THE CHINESE TO MEET AND THAT STEPS SHOULD BE TAKEN TO LIMIT THE IMPACT ON HONG KONG. THE

PRESIDENT SAID THAT HE HAD NO OBJECTION TO MR PATTEN ARGUING THE CASE FOR RENEWAL, BOTH PUBLICLY AND IN HIS MEETINGS ON THE HILL. HE WAS GOING TO HAVE TO REACH A CONCLUSION ON THIS IN THE COURSE OF THE NEXT THIRTY DAYS, SO THE TIMING OF THE GOVERNOR'S VISIT WAS EXCELLENT.

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CONFIDENTIAL

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