TNAG-2242-FCO40-3223-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 126

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OUR GOVERNMENT ECONOMIST, IS BEING SENT BY FAX.

3. IN ADDITION, CHINA'S LOSS OF MFN STATUS WOULD:

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(A) DAMAGE US INTERESTS IN HONG KONG (THE US IS ONE OF OUR LARGEST FOREIGN INVESTORS, WITH TOTAL INVESTMENT OF ABOUT USD 6 BILLION INVOLVING 900 US FIRMS, INCLUDING 147 FACTORIES): AND

(B) HAVE A VERY NEGATIVE EFFECT ON FOREIGN INVESTMENT INTO HONG KONG, ON WHICH HONG KONG'S FUTURE STABILITY AND PROSPERITY DEPEND.

4. WE WILL REPORT SHORTLY ON OUR PROPOSED STRATEGY FOR TACKLING THE ISSUE THIS YEAR.

WILSON

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