XN000022-1992-07-08 — Page 5

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WEDNESDAY, JULY 8, 1992

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ON A RELATED POINT, MEMBERS MAY WISH TO NOTE THAT, AT AN MEETING OF THE TRADE SUB-COMMITTEE OF THE WAYS AND MEANS COMMITTEE THE HOUSE OF REPRESENTATIVES, WHICH TOOK PLACE ON 23 JUNE 1992 WASHINGTON, WHEN CHINA'S MFN STATUS WAS BEING DISCUSSED, A CONGRESSMAN

CERTAIN DID SAY THAT, AT A RECENT MEETING WITH SOME MEMBERS OF PARLIAMENT IN LONDON, HE HAD BEEN TOLD THAT MFN REVOCATION WOULD A DEVASTATING BLOW TO HONG KONG'S ECONOMY AND BUSINESS CONFIDENCE.

DEAL

IN CONCLUDING MY COMMENTS ON THE MOTION, I WOULD LIKE TO ASSURE MEMBERS THAT THE ADMINISTRATION WILL CONTINUE TO DO ITS UTMOST TO WORK FOR THE UNCONDITIONAL RENEWAL OF MFN TRADING STATUS FOR CHINA WHICH IS SO IMPORTANT FOR THE WELL-BEING OF HONG KONG. WE WILL CONCENTRATE EFFORTS ON SECURING ENOUGH SUPPORT IN THE CONGRESS TO SUSTAIN PRESIDENTIAL VETO OF A JOINT RESOLUTION OF DISAPPROVAL CONDITIONALITY BILL. THE OFFICIAL MEMBERS OF THIS COUNCIL WILL FOR THE MOTION.

AS REGARDS THE AMENDMENT PROPOSED BY DR HUANG CHEN-YA, OFFICIAL MEMBERS WILL VOTE AGAINST IT. I MUST EMPHASISE THAT VOTE HAS NOTHING TO DO WITH THE HUMAN RIGHTS SITUATION IN CHINA.

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THE REASONS FOR VOTING AGAINST THE AMENDMENT ARE, FIRST, IT DOES NOT CONTAIN THE MOST IMPORTANT REQUIREMENT, FROM OUR POINT VIEW, THAT THE EXTENSION OF CHINA'S MFN TRADING STATUS UNCONDITIONAL.

SHOULD A CONDITIONAL RENEWAL OF CHINA'S MEN STATUS WOULD TAKEN BY BUSINESSMEN AND INVESTORS AS AN ADVANCE NOTICE TO WIND OPERATIONS AND INVESTMENTS IN CHINA. THE HONG KONG GOVERNMENT THEREFORE, CONSISTENTLY SUPPORTED UNCONDITIONAL RENEWAL ON THE GROUNDS THAT CONDITIONAL EXTENSION WILL BE VERY DAMAGING TO HONG KONG.

DOWN HAVE,

MY SECOND POINT IS THAT WE HAVE ALL ALONG BELIEVED THAT MFN A TRADE ISSUE WHICH SHOULD NOT BE LINKED TO OTHER ISSUES, SUCH THOSE INCLUDED IN THE TWO CONDITIONALITY BILLS. OUR POSITION NOTHING TO DO WITH THE MERIT OR OTHERWISE OF THESE OTHER ISSUES. THIS RESPECT, I WOULD LIKE TO NOTE, ONCE AGAIN, THAT THE ADMINISTRATION'S POSITION IS ALSO THAT MFN IS NOT THE RIGHT TOOL ACHIEVE OTHER POLICY OBJECTIVES.

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FINALLY, CALLING FOR EXTENSION OF MFN WITHOUT SPECIFYING THAT IT SHOULD BE UNCONDITIONAL AND LINKING NFN EXTENSION WITH A ISSUE

NON-MFN MAY WELL BE PERCEIVED ELSEWHERE AS A WEAKENING IN OUR SUPPORT FOR UNCONDITIONAL RENEWAL AND RISK PLAYING INTO THE HANDS OF THOSE WHO ARE TRYING TO DEFEAT THE US ADMINISTRATION IN ORDER TO ACHIEVE OWN DOMESTIC POLITICAL ENDS.

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A FEW MEMBERS SPEAKING IN FAVOUR OF THE AMENDMENT OUR SUPPORT OF UNCONDITIONAL RENEWAL IS UNREALISTIC.

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THAT AGREE WITH THIS VIEW. OUR POSITION IS A REALISTIC ONE. IN TERMS OF US DOMESTIC POLITICS, HONG KONG IS BUT ONE FACTOR IN THE MFN EQUATION. IN OUR EFFORTS TO HELP MAINTAIN CHINA'S MFN STATUS, OUR BEST COURSE OF ACTION LIES IN SUPPORTING THE US ADMINISTRATION'S FIRM STANCE THAT CHINA'S MFN STATUS SHOULD BE RENEWED WITHOUT CONDITIONS. THANK SIR.

YOU,

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