TNAG-2243-FCO40-3224-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 78

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MDHIAN 8655

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ISSUES WERE ONE WAY OF TRYING TO BRING ABOUT CHANGE IN CHINA. BUT MFN WAS ALSO A MEANS OF BRINGING OUTSIDE INFLUENCE TO BEAR. HURTING CHINA'S ECONOMY WOULD NOT HELP PROMOTE PRIVATISATION OR HUMAN RIGHTS. TO WITHDRAW MFN WOULD PUNISH SOUTH CHINA THE VERY REGION WHERE FREE MARKET REFORMS AND THE CHALLENGE TO CENTRAL AUTHORITY WERE STRONGEST. IT WOULD ENDANGER 2 MILLION PRIVATE SECTOR JOBS IN SOUTH CHINA. IT WOULD ALSO DEAL QUOTE A BODY BLOW TO HONG KONG, THE BASTION OF FREEDOM AND TRADE IN THE FAR EAST UNQUOTE.

5. IT WAS IMPORTANT TO PURSUE A POLICY THAT HAD THE BEST CHANCE OF CHANGING CHINESE BEHAVIOUR. THE MOST COMPELLING REASON TO RENEW MFN WAS NOT ECONOMIC OR STRATEGIC BUT MORAL. IT WAS RIGHT TO EXPORT THE IDEALS OF FREEDOM AND DEMOCRACY TO CHINA. THE ISOLATION OF CHINA FOR TWO DECADES AFTER 1949 HAD PROVED TO BE AMONG THE MOST BRUTAL EPISODES IN CHINESE HISTORY. A POLICY WHICH PROMOTED CONTACTS AND COMMERCIAL WITH THE CHINESE COULD HELP CREATE A

CLIMATE FOR DEMOCRATIC CHANGE.

6. IN RESPONSE TO QUESTIONS FROM THE PRESS ON 28 MAY PRESIDENT BUSH REITERATED, AMONG OTHER THINGS, THAT HE WOULD LIKE OPPONENTS OF MEN TO UNDERSTAND EXACTLY WHAT WOULD HAPPEN TO HONG KONG IF MFN WERE WITHDRAWN. HE SAID THE BRITISH WERE PARTICULARLY CONCERNED: HE HAD ALREADY TALKED TO THE PRIME MINISTER ABOUT IT.

7.

ON THE SAME DAY AS THE PRESIDENT'S YALE SPEECH THE WHITE HOUSE

ANNOUNCED THAT THE ADMINISTRATION WAS IMPLEMENTING THREE MEASURES

TO LIMIT THE EXPORT OF MISSILE AND SATELLITE TECHNOLOGY TO CHINA.

LICENCES WOULD BE REFUSED TO COMPANIES THAT HAD APPLIED TO SELL

CHINA HIGH-SPEED COMPUTERS THAT COULD BE USED FOR MISSILE FLIGHT

TESTING. LICENCES WOULD ALSO BE REFUSED TO AMERICAN COMPANIES

SEEKING TO PARTICIPATE IN SATELLITE LAUNCHES BY CHINA FOR AS LONG

AS THE ADMINISTRATION WAS NOT SATISFIED THAT CHINA WAS RESPECTING

INTERNATIONAL REGULATIONS ON THE TRANSFER OF BALLISTIC MISSILE AND NUCLEAR TECHNOLOGY. LASTLY, AMERICAN COMPANIES WOULD BE BARRED FROM SELLING ANY MISSILE TECHNOLOGY OR EQUIPMENT TO CHINA'S PRECISION MACHINERY IMPORT/EXPORT CORPORATION, WHICH THE ADMINISTRATION BELIEVED HAD TRANSFERRED MISSILE TECHNOLOGY AND EQUIPMENT TO PAKISTAN.

COMMENT

PREDICTABLY CONGRESSIONAL DEMOCRATS HAVE STRONGLY CRITICISED THE PRESIDENT'S DECISION. MITCHELL (SENATE MAJORITY LEADER)

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