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FROM: Sir John Coles
DATE:
CC:
1 May 1991
Mr Beamish
Mr Paul, HKD
Mr Davies, FED
Mr Bone, ERD
Mr Burns, NAD
The US Chargé d'Affaires invited me to a tête-à-tête lunch today.
1.
2. Mr Woods said that his most vivid contact with my predecessor had been on the subject of Vietnamese Boat People. I said that the subject was nearing the top of our agenda again. Hong Kong faced a range of problems at present. Relations with China were becoming more difficult. The Chinese attempt, in the airport negotiations, to assert a right of veto was distinctly disturbing; meanwhile the VBP problem was boiling up again. There were between 50 and 60 new arrivals each day. The partial measures of the last 12 months had made little or no impact on the problem. I wanted to signal to Mr Woods that this issue could again become a major topic of discussion between us. Sir Antony Acland had recently spoken to Mr Kimmitt who had agreed to pursue a dialogue with us to try to resolve the problem. We should certainly be taking this up. Kimmitt would be in Hong Kong shortly and would hear from the Governor first-hand about the nature of the problem.
•
I said that I was interested in the US debate about the renewal of MFN status for China. Mr Woods confirmed that this year's debate on the Hill would be much more difficult than last. There was a strong lobby which objected to Chinese protectionist policies, particularly given the unfavourable balance in US trade with China. There was also concern about Chinese experts. of "militarily applicable technology". All this in addition to the Human Rights lobby. I pointed out that this could become another problem for Hong Kong because of its profitable trade in re-exports of Chinese goods. A decision to withdraw MFN status for China would have pretty serious implications for the Hong Kong economy unless Hong Kong was ring-fenced in some way. Mr Woods said that he had not been aware of the Hong Kong dimension. warned him that we were likely to raise the issue in Washington in the next couple of weeks.
4. We discussed Cambodia, but he had little to offer.
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