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has made. The purpose of increasing the pressure would be to influence the way the Chinese behaved, or at the very least to make sure that they realised that they would pay a high price in international terms higher than they would want to pay if they damaged Hong Kong. Real constraints on Chinese behaviour will arise only when they see that their policies towards Hong Kong will, if continued, affect their own economic reform programme or position in the world. The most powerful of the available tools are therefore US policies towards China, especially MFN, and GATT re-accession.
13.
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On MFN, it seems unlikely that President Clinton will be willing to maintain the Bush policy of unconditional renewal although he and the key players in Congress may be willing to settle for renewal in 1993, but setting out conditions which would have to be met before further renewal in 1994. Our policy is conditioned by the vital importance for Hong Kong of US/China trade (70% of which flows through Hong Kong). Estimates of the damage which would be done to Hong Kong if MFN status were removed indicate that it could cost Hong Kong 60,000 jobs and a halving of GNP growth. We have therefore made it clear that we
are against any linkage between MFN renewal and China's treatment
of Hong Kong. The best outcome for us would be to keep the threat of withdrawal hanging over China, but to avoid stringent conditions (for instance linking MFN to human rights) likely to lead to the withdrawal of MFN because the Chinese could or would
not meet them. It will be tricky to achieve this. We may need to consider lobbying in due course for conditions whose implementation was delayed pending bilateral US/China negotiations, and/or token conditions which did not hurt Hong
Kong.
14.
On GATT, the working party formed in 1986 is in the initial stages of preparing a protocol setting out terms of Chinese adherence to GATT. Negotiations could be completed by as early
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as the end of 1993, although considerable differences of view do
remain between China and key GATT parties over the terms of the protocol. While there is scope to influence the timing of
Chinese re-accession, and indeed the outcome, there are constraints on us. Our traditional position has been to avoid taking positions in GATT on the basis of political
considerations. We also have to work through the Commission, who
represent the Community and have competence in this area.
A
15. The US position on GATT re-accession will be crucial.
formal US/China bilateral will be held on 1 March (the first since 1989). The Americans intend to take the Chinese through
what needs to be done if China is to achieve accession to GATT.
We should keep in touch with this process which could offer some leverage.
16. We should continue our policy of briefing other partners. Several have economic interests in Hong Kong which give them both an incentive and a locus for quiet intervention with the Chinese. We should encourage them to speak quietly to the Chinese as opportunity arises, invoking their own stake in Hong Kong rather
than our policies.
17.
Declaratory policy, eg through G7 or CHOGM, would remind China of international concern about their policies towards Hong Kong. But it would tend to feed Chinese conspiracy theories (they have already drawn a link between the Governor's
constitutional package and what they see as US efforts to undermine the present Chinese regime). The Chinese will be bound to react very strongly, to a point where chances of a cooperative relationship over Hong Kong for the last years up to 1997 will be further reduced. It could also cause unease in Hong Kong; as 1997 approaches sensitivity to third countries rocking the boat is likely to increase. A higher declaratory profile would therefore be better avoided while hope of dialogue with China
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But
remains. We should keep it in reserve in case relations with
China deteriorated further and Hong Kong opinion favoured enlisting wider support irrespective of China's reactions. we should not underestimate the difficulty of securing agreement from some of our partners (eg Japan in the G7 and Third World
countries in CHOGM) unless Chinese behaviour is again such as to cause international outrage.
18. Initiating debate on Hong Kong in the UN would be a very high-profile challenge to China. It would also be high-risk. Some countries could seek to reopen the self determination issue. This might in extremis trigger an early Chinese takeover (almost
certainly not the case with the other options discussed in this
paper). China in any case has a veto in the Security Council,
and has not accepted compulsory jurisdiction of the International
Court of Justice. However, we might wish to consider a wider UN monitoring role post 1997. For example, the fact that the
International Covenant on Civil and Political Rights is to be applied to the Hong Kong SAR will give a locus for UN monitoring
of human rights issues. Whether we pursued such high-profile
options would depend on whether, at the time, we felt there was no alternative to public confrontation as a means of applying pressure on China.
HONG KONG DEPARTMENT
25 February 1993
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