XN000022-1992-07-08 — Page 4

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WEDNESDAY, JULY 8, 1992

THIS APPROACH, ALTHOUGH MORE SELECTIVE THAN WITHDRAWAL OF MFN STATUS ALTOGETHER, WOULD NOT INSULATE HONG KONG FROM THE ENSUING ADVERSE ECONOMIC CONSEQUENCES. LEAVING ASIDE THE CHINESE RESPONSE ΤΟ CONDITIONALITY, THE US ADMINISTRATION HAVE STATED VERY CLEARLY THAT THE TWO BILLS ARE UNWORKABLE BECAUSE IT WOULD BE VERY DIFFICULT TO DETERMINE WHICH EXPORTS ARE PRODUCED BY STATE-OWNED ENTERPRISES. CONFUSION ABOUT THE APPLICABILITY OF THE LEGISLATION WOULD NOT ONLY GIVE RISE TO CHAOS AND BE DETRIMENTAL TO TRADE, IT WOULD ALSO CREATE UNCERTAINTY AMONG INVESTORS IN HONG KONG AND CHINA. WHILE THE IMPACT HONG KONG COULD NOT BE QUANTIFIED IN VIEW OF THE LACK OF DATA ON EXPORTS BY CHINESE STATE-OWNED ENTERPRISES, ONE THING FOR CERTAIN IS THAT HONG KONG WILL SUFFER BECAUSE OF ITS CLOSE ECONOMIC TIES CHINA.

WITH

IN RECOGNITION OF THE IMPORTANCE OF THE MATTER, NEMBERS OF THIS COUNCIL HAVE HELPFULLY ISSUED A LETTER EARLIER ON TO KEY SENATORS URGE SUPPORT FOR UNCONDITIONAL RENEWAL OF CHINA'S MFN STATUS IN 1992/93. THE PRIVATE SECTOR HAS ALSO BEEN WORKING VIGOROUSLY ON THIS FRONT. IN MAY, TWO MISSIONS OF BUSINESSMEN VISITED WASHINGTON DC

ΤΟ LOBBY THE SUPPORT OF BOTH THE BUSINESS SECTOR AND THE POLITICIANS IN THE US. ON THE PART OF THE GOVERNMENT, OUR WASHINGTON OFFICE HAVE WORKED WITH GROUPS IN THE US HAVING BUSINESS OR EXPORTING INTERESTS IN CHINA, URGING THEM

SUCCESSFULLY - TO IMPRESS UPON THEIR CONGRESSIONAL REPRESENTATIVES THE DAMAGE THAT NON-RENEWAL OR CONDITIONAL RENEWAL WOULD DO TO THE US ECONOMY.

IN ADDITION, THROUGH THE SUSTAINED EFFORTS OF MY COLLEAGUES IN OUR WASHINGTON OFFICE AND THROUGH MY OWN VISIT THERE IN MAY, WE HAVE ENSURED THAT CONGRESSIONAL LEADERS AND SENIOR US ADMINISTRATION OFFICIALS ARE FULLY AWARE OF THE IMPORTANCE ΤΟ HONG KONG OF UNCONDITIONAL MEN RENEWAL. FURTHERMORE, TO ENSURE THAT A COHERENT HONG KONG MESSAGE IS CONVEYED IN THE MULTIPLE LOBBYING EFFORTS BY THE GOVERNMENT AS WELL AS THE PRIVATE SECTOR, WE HAVE MET WITH CHAMBERS OF COMMERCE AND OTHER TRADE AND INDUSTRIAL GROUPS REGULARLY IN BOTH FORMAL AND INFORMAL SETTINGS, UPDATING THEM ON THE LATEST DEVELOPMENTS. THIS PROCESS IS CONTINUING.

THE KEY TO THE MFN BATTLE, IF I MAY USE SUCH A WORD, LIES IN PRESIDENT BUSH'S VERY FIRM STAND THAT WITHDRAWAL OR CONDITIONAL RENEWAL OF MEN STATUS FOR CHINA WOULD NOT ACHIEVE THE US'S OTHER POLICY OBJECTIVES. HOWEVER, WE IN HONG KONG CANNOT AFFORD ΤΟ BE COMPLACENT GIVEN THAT THE PRESIDENT WAS ONLY ABLE TO SUSTAIN HIS VETO AGAINST THE BILL INTRODUCED LAST YEAR ATTACHING CONDITIONS TO MFN RENEWAL BY A NARROW MARGIN OF 5 VOTES IN THE SENATE IN MARCH THIS YEAR. THE POSITION THIS YEAR IS MADE MORE DIFFICULT BECAUSE OF DOMESTIC ELECTION POLITICS IN THE UNITED STATES.

MR DEPUTY PRESIDENT, I WOULD LIKE TO STATE FOR THE RECORD THAT WHILE HONG KONG POSSESSES FULL AUTONOMY IN THE CONDUCT OF ITS EXTERNAL COMMERCIAL RELATIONS, THE UK GOVERNMENT HAS ALL ALONG BEEN VERY SUPPORTIVE OF HONG KONG IN RESPECT OF THE MFN ISSUE AND, WHEN NECESSARY, HAS ON PREVIOUS OCCASIONS APPROACHED THE US ADMINISTRATION AS WELL AS MEMBERS OF THE US CONGRESS TO EXPRESS CONCERN AT THE DAMAGING IMPACT ON HONG KONG IF CHINA WERE TO LOSE ITS MFN TRADING STATUS IN THE US. SOME OF THESE CONTACTS WERE AT THE HIGHEST OF THE UK AND US GOVERNMENTS. WE ARE MOST GRATEFUL FOR

LEVELS THE UK

THE UK THE

GOVERNMENT'S SUPPORT AND HAVE NO DOUBT THAT, IF NECESSARY, GOVERNMENT WILL AGAIN OFFER US EVERY ASSISTANCE IN THIS MATTER IN FUTURE.

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