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ourselves having to resist any Chinese proposals for the post-1997 period which in our view would damage Hong Kong's trading position. China's own enormous potential as a textile and clothing producer, and her extreme sensitivity over textiles, e.g. as demonstrated in her dispute with the US, will of course play a role in any Chinese reaction, and without knowing to what extent China will be involved, if at all, in the MFA, it is hard to speculate on her likely tactics.
4. As a footnote to what my earlier letter said about adverse reactions of LDC suppliers, it might be worth recalling the 1980 dispute over basket exit quotas which soured our relations with Indonesia for some time. This sensitivity is shared by other members of ASEAN.
CC:
HKD
FED
You
J A Shepherd
European Community Department (External)
BCC:
SEAD
Miss Spencer, UKRep Brussels
Miss Lambert, Cabinet Office
HL Davies, Peking
RP Margolis, Government Secretariat Hong Kong
A Montgomery, UKMis Geneva (with reference)
CC W Adams, Senior Trade Commissioner, Hong Kong
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