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035032 MDHIAN 0326
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FM WASHINGTON
TO IMMEDIATE FCO
TELNO 1717
OF 212351Z JUNE 89
INFO IMMEDIATE PEKING, HONG KONG
INFO PRIORITY TOKYO, MOSCOW
OUR TELNO 1654: US/CHINA
SUMMARY
1.
PRESIDENT BUSH ANNOUNCES SUSPENSION OF ALL HIGH LEVEL OFFICIAL EXCHANGES, AND CALLS FOR POSTPONEMENT OF NEW WORLD BANK LOANS TO CHINA. BAKER DEPLORES CHINESE FAILURE TO HEED FORMAL US APPEAL FOR CLEMENCY OF THOSE SENTENCED TO DEATH, BUT INDICATES THAT ADMINISTRATION ARE NOT CONSIDERING ADDITIONAL ACTION AT THIS TIME.
DETAIL
2. THE WHITE HOUSE ANNOUNCED LATE ON 20 JUNE THAT THE PRESIDENT HAD DIRECTED THAT THE US GOVERNMENT QUOTE SUSPEND PARTICIPATION IN ALL HIGH LEVEL EXCHANGES OF GOVERNMENT OFFICIALS UNQUOTE WITH CHINA IN ADDITION TO THE SUSPENSION OF MILITARY EXCHANGES PREVIOUSLY ANNOUNCED. THE STATEMENT ADDED THAT IN ADDITION THE US WOULD QUOTE SEEK TO POSTPONE CONSIDERATION OF NEW INTERNATIONAL FINANCIAL INSTITUTION LOANS TO CHINA UNQUOTE AND MADE CLEAR THAT THESE STEPS WERE TAKEN IN RESPONSE QUOTE TO THE WAVE OF VIOLENCE AND REPRISALS BY THE CHINESE AUTHORITIES AGAINST THOSE WHO HAVE CALLED FOR DEMOCRACY UNQUOTE.
3. THIS WHITE HOUSE STATEMENT FOLLOWED A STATEMENT BY BAKER IN THE COURSE OF A HEARING IN FRONT OF THE SENATE FOREIGN RELATIONS COMMITTEE EARLIER IN THE DAY THAT HE HAD RECOMMENDED TO THE PRESIDENT THE SUSPENSION OF ALL CONTACTS AT ASSISTANT SECRETARY LEVEL OR ABOVE WITH THE CHINESE AND POSTPONEMENT OF CONSIDERATION OF LOAN APPLICATIONS QUOTE AT LEAST FOR THE TIME BEING WHILE WE CONTINUE TO REVIEW, AS THE PRESIDENT HAS SAID WE WOULD DO, THE FURTHER ASPECTS OF OUR POLICY IN THE LIGHT OF UNFOLDING EVENTS UNQUOTE. BAKER ADDED THAT A FIRST CONSEQUENCE OF SUSPENDING CONTACTS WOULD BE THE POSTPONEMENT OF COMMERCE SECRETARY MOSBACHER'S JULY VISIT TO PEKING.
4.
BAKER'S UNUSUAL STEP OF DISCLOSING HIS RECOMMENDATION TO THE PRESIDENT AND THE WHITE HOUSE'S PROMPT ANNOUNCEMENT THAT HIS RECOMMENDATION HAD BEEN ACCEPTED OVERSHADOWED A STATEMENT BY PRESIDENT BUSH EARLIER IN THE DAY CALLING IN SOLEMN TERMS FOR CLEMANCY FOR THOSE SENTENCED TO DEATH IN SHANGHAI. THE WHITE
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