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MFN STATUS FOR CHINA
RESTRICTED
FROM:
RECE
11KB 040/4
17 MAY 1991
H LI Davies TA
Far Eastern Department
DATE:
15 May 1991
CC:
PS/Lord Caithness
Sir J Coles
Mr Burns, NAD PUSD (CN)
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1. I sat next to the Chinese Chargé d'Affaires at a dinner on 14 May. It was unfortunately not the sort of occasion where we could have a private conversation, since i
it was round table of ten people talking about other matters. Nevertheless I did manage to broach MFN with him as discreetly as possible. I pointed out that the British Government were already making substantial efforts with the American administration but that we saw this as a joint endeavour with the Chinese. We shared a common interest in the Hong Kong dimension but the substance of the matter needed to be solved between the Chinese and the United States. It was therefore incumbent on the Chinese to make the necessary moves to satisfy Congress. Our judgement was that it would be much more difficult to ensure continuation of MFN this year.
2. Mr Yu, parroting the party line, said that MFN was not favour granted by one country to another. There was mutual benefit. I questioned this; what benefit was there to the United States in the ten billion dollar deficit they ran with China? One could argue, I supposed, that American consumers benefitted, but the balance was very much in favour of China. We were extremely concerned about the effect on Hong Kong. Whatever we did with the US it was essential that the Chinese should take positive steps. Yu asked what the Chinese were expected to do. I responded that Congress were looking for improvements in a number of areas including human rights. Mr Yu said that Congress had a history of bizarre demands on China including on birth control. Acknowledging this, I said that nevertheless if MFN were to continue, some movement towards Congress was essential.
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HLDAGG
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