TNAG-2056-FCO40-2934-Hong-Kong-and-the-Organisation-for-Economic-Cooperation-and--1990 — Page 101

CONFIDENTIAL

China might find an OECD relationship for HK less palatable than one with GATT or other genuinely international or regional organisations OECD is after all a limited membership club of the developed (and multiparty) nations; although, post 1997, this could give China an ear into these countries' deliberations, the Chinese could take exception to the exclusivity of the club and nature of its membership. Membership of, or a relationship with, OECD might be construed as yet another British plot to tie HK into a long-term commitment to HMG and the like-minded capitalist governments. But this is all speculation until the question

is put to the Chinese.

5. As a footnote, another possible political objection on the part of the membership (not touched on by Mr Gordon) would be that they see no reason why, post 1997, a part of China should be entitled to eavesdrop on their intergovernmental discussions. This objection could be more difficult to counter than our partners' sensitivity to Chinese reactions, which I suspect would be easily manageable if we showed that Peking had been consulted. Another political objection, however, is likely to be the general resistance to expansion of numbers in OECD. There is already the prospect of adhesion of certain East Europeans (Paye has given the Czechs a pretty fair wind). And if we tried to engineer a relationship with Hong Kong, the Portuguese would be honour bound to follow this on behalf of Macao. Where would it end?

6. All in all, a difficult issue.

T10AGR

H L1 Davies

CONFIDENTIAL