TNAG-2242-FCO40-3223-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 122

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Hong Kong is home to nearly six million people. These are people who thrive on freedom, free trade and enterprise. Their confidence was badly shaken by last June's tragic events in Peking. We are taking a number of measures to reassure people about the future and to stem the outflow of talent from the

territory. It is vital that we succeed if we are to achieve a

smooth transition in 1997. It is in the interests of the entire international community that Hong Kong remains stable and prosperous. At this critical moment, when morale is at a low ebb, and when Hong Kong's economy is going through a fairly sharp downturn, non-renewal of China's MFN status would inevitably be a serious blow to confidence in the territory.

I appreciate that there are many other important factors to be taken into account in reaching your decision, not least the question of human rights in China. But I doubt whether a

measure which will affect most directly those in China committed to an outward looking approach to the rest of the world can in the long term further the cause of reform.

I know that you share these concerns and I am sure that you will take them into account when taking your difficult decision about China's MFN status.

Youn

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The President of the United States of America

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