TNAG-2242-FCO40-3223-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 33

Paper for Sir J Coles Meeting

CHINA : MFN

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1/%

Thank you.

4.c.7.

1. Last year we had a clear interest, on behalf of Hong Kong, in arguing for MFN extension. We also used the fact that we had argued with the US as a demonstration to Peking of our goodwill, in the hope of reducing their suspicions and winning their cooperation.

2.

This year the picture is more complex: -

(i)

(ii)

(iii)

The Hong Kong economic arguments are the same, as set out in Mr Paul's minute;

But the Chinese have done little or nothing to respond to

our help

they have been bolshy over PADS and JLG issues

they have made very little attempt to respond to human

rights concerns

they continue unacceptable trade practices (intellectual property rights infringements);

Nevertheless Ministers have already taken positions on

this issue

the Prime Minister mentioned it to President Bush on

13 March

the Secretary of State told Qian Qichen we would continue to argue the case with the US.

3. I conclude therefore that for the reasons in (i) and (iii) we should continue to do what we can. But for the reasons in (ii) we should consider what else to say to the Chinese. This might include the following points: -

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