TNAG-2242-FCO40-3223-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 129

CONFIDENTIAL

CONFIDENTIAL

FM FCO

TO DESKBY 23010OZ HONG KONG TELNO 562

OF 22173OZ MARCH 91

INFO PRIORITY PEKING, WASHINGTON

HAB 090/4 fk

3 APR 1991

015231

MDHOAN 0405

TOP COPY ODIST?

CHINA/US RELATIONS: MFN STATUS

1.

MR CHTUNG (ASSOCIATED MARITIME CO LONDON) WHO WAS A GUEST

AT THE RECENT LUNCH GIVEN BY THE PRIME MINISTER FOR HONG KONG BUSINESSMEN HAS WRITTEN TO THE PM ABOUT THE IMPORTANCE OF

CHINA'S MFN STATUS TO HONG KONG.

2.

OUR PROPOSED REPLY TO MR TUNG WILL ACKNOWLEDGE THE IMPORTANCE WE ATTACH TO CHINA CONTINUING TO ENJOY US MFN STATUS, POINT OUT THE SUPPORT HMG GAVE LAST YEAR TO A SATISFACTORY RESOLUTION OF THE ISSUE AND INDICATE THAT OUR POSITION HAS NOT CHANGED.

3.

MORE GENERALLY, BOTH FOR THE PURPOSES OF THE ACCOMPANYING SUBMISSION AND FOR THE FUTURE (CHINA'S MFN STATUS IS DUE FOR REVIEW IN MAY THIS YEAR) WE NEED TO ASSEMBLE SUPPORTING ARGUMENTS AND STATISTICS FOR MAINTAINING OUR STAND ON THIS

QUESTION. WE ASSUME THAT THE CASE WHICH WAS MADE LAST YEAR FOR NOT REVOKING CHINA'S STATUS HOLDS EQUALLY GOOD FOR 1991. YOUR TELNO 1534 OF 10 MAY 90 CONTAINED VERY USEFUL FACTS AND FIGURES ON HONG KONG/CHINA TRADE, US INVESTMENT IN HONG KONG, AND THE ADVERSE AFFECT THAT THE LOSS OF CHINA'S STATUS WOULD HAVE ON

HONG KONG'S ECONOMY.

4. DESKBY 25090OZ WE WOULD BE GRATEFUL FOR AN ASSESSMENT/UPDATE (WITH FIGURES IF POSSIBLE) OF WHAT THE IMPACT ON HONG KONG WOULD BE NOW, IF MFN STATUS WERE WITHDRAWN: WE PRESUME THE EFFECTS WOULD BE EVEN MORE SEVERE. IN SLOWER TIME, WE WOULD BE GRATEFUL FOR A MORE DETAILED ANALYSIS, IN PREPARATION FOR THE STEPS WE MAY NEED TO TAKE TO DEMONSTRATE WHY IT IS VITAL FOR HONG KONG

THAT CHINA'S MFN STATUS IS RENEWED.

HURD

YYYY

1

PAGE CONFIDENTIAL