DRAFT PRESS LINE
CHINESE DISCRIMINATION AGAINST BRITISH COMMERCIAL INTERESTS
Senior Chinese leaders have said frequently and publicly that political and economic issues should be kept separate.
(eg in the context of renewal by the US of Most Favoured Nation status for China, and most recently in a statement made by Ambassador Ma to a CBI Business Conference).
- We have not been told formally by the Chinese that they intend to discriminate against British firms.
We note that
- Economic relations are mutually beneficial. China at present enjoys an annual trading surplus of £500 million with the UK.
- Discrimination against British firms would not be consistent with the EC/China Cooperation Agreement, or the spirit of China's GATT application.
- A mistake to think that discrimination against UK commercial and economic interests would bring about change of policy on Hong Kong.
ww
[if raised]
Aware of report concerning Shandong power project being cancelled. Seeking confirmation.
[Canton Metro: if raised]
Disappointed that British companies did not secure the rolling-stock contract. Still large number of contracts to be awarded in the project for which British companies are continuing to compete.
dis.comm.ADM
SLM