CONFIDENTIAL

VISIT OF MR GOODLAD TO THE UNITED STATES, 19 27 SEPTEMBER

HONG KONG

Background

CONSTITUTIONAL TALKS

1.

The Governor of Hong Kong visited Washington and New York from 2 to 8 May and met the President and several key decision-makers in the Administration and Congress. During his call on the President he explained his democratic reforms and the reaction of the Chinese to them. The President expressed strong support, both publicly and privately.

2.

Talks with Peking about the 1994/95 election arrangements for Hong Kong began in Peking on 22 April and are continuing. Progress has been slow, but the atmosphere has been business-like. The Secretary of State's meeting with the Chinese Foreign Minister in Peking on 9 July was useful in focussing Chinese attention on the essential issues and the need to make more rapid progresss. But there is still much difficult ground to cover and the gap between us is wide. Chinese have rejected our proposals on functional constituencies and refuse to discuss the through train. We cannot yet judge whether this tough line is a negotiating ploy, or a sign that they no longer expect to reach an agreement. Round 12 is due 26 27 September.

The

HAN DONGFAN

3.

Han Dongfang, a would-be trade union organiser, remains in Hong Kong following his expulsion from the PRC on return from the US (via Hong Kong) on 16 August. He wishes to re-enter the PRC. To date the Chinese, who have cancelled his passport, are refusing to allow him to do this on the grounds that he took part in subversive activities while in the US. They have announced publicly that if he wishes to return he must first 'repent'. Hong Kong have been pressing the NCNA to let him back into China. Privately the US have told Hong Kong that they would allow him back if he wished it.

MFN

4. Most Favoured Nation Status (MFN) enables Chinese imports into the US to benefit from preferential tariffs. China's MFN status has to be renewed by the President on an annual basis. President Clinton renewed it by Executive Order on 28

bgrnd.gladvisus.NAT

JEB

CONFIDENTIAL

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