TNAG-2243-FCO40-3224-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 92

CONFIDENTIAL

J S Wall Esq CMG LVO

10 Downing Street

London

SW1A

MOST FAVOURED NATION STATUS FOR CHINA: EFFECTS ON HONG

KONG

When the Prime Minister met President Bush in Bermuda in March he flagged up our concern over the effect non-renewal of China's MFN status would have on

Hong Kong. The Foreign Secretary believes that we have now reached the point at which a message from the Prime Minister to the President on this is needed.

Our Embassy in Washington advise that although President Bush has until 3 June to reach his decision on MFN, he is likely to make an announcement sooner, possibly as early as next week. He is likely to recommend renewal. But it is not certain that the

President can overcome the opposition to this in the

Congress. The Administration might therefore

(reluctantly) have to look at some form of

conditionality, in order to secure renewal for a further

year.

DENAAY

CONFIDENTIAL