TNAG-2242-FCO40-3223-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 31

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Continuing disputes over textiles: the US cut China's

textile quota by about a third in February in retaliation

for alleged circumvention by China of the textile quotas;

Continuing dispute over intellectual property: pirating of

general publications, computer software and patents;

- Fears about diversion to third countries of chemical

warfare precursurs and other sensitive material; and

Continuing concern about China's performance on human

rights.

4.

The possibility of Congress being able to muster the

two-thirds majority required to overturn a Presidential decision to renew thus seems much stronger this year. Congress seems likely at least to try to attach conditions

to the renewal of China's MFN status.

B

5.

Washington has reported that the President would

probably be able to sustain a veto but that the

Administration may be tempted to look at possible deals which would avoid a veto fight.

Strategy

6.

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Hong Kong have set out their strategy in telno 1062

(attached). This is essentially to continue to promulgate

the message that withdrawal of China's MFN status would

damage Hong Kong. They will do this by extending their

lobbying targets in the US and by undertaking direct lobbying there. Hong Kong Government also intend to coordinate lobbying efforts made by the Hong Kong private

sector.

For our part, the Prime Minister mentioned to the President on 13 March his concern over the impact on Hong

7.

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