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FM PEKING
TO PRIORITY FCO
TELNO 1115
OF 160705Z JULY 91
AND TO PRIORITY WASHINGTON
INFO PRIORITY HONG KONG, B T C HONG KONG
MOST FAVOURED NATION STATUS: CHINESE PRESS REPORTS.
SUMMARY.
1.
CHINESE PRESS ON 12 AND 13 JULY CARRIED ARTICLES ATTACKING CONGRESS' DECISION NOT TO EXTEND MFN TO CHINA.
DETAIL.
2. ON 12 JULY PEOPLE'S DAILY CARRIED A SIGNED ARTICLE ATTACKING RECENT U S ACCUSATIONS OF CHINESE ARMS SALES AND THE THREAT TO CANCEL MFN STATUS. THE ARTICLE WAS ENTITLED ''LOOK AT YOURSELF IN THE MIRROR BEFORE ACCUSING OTHERS'' AND GAVE A LENGTHY LIST OF US ARMS SALES. IT CRITICIZED US NEWSPAPERS FOR ALLEGING THAT CHINESE ARMS SALES POSED A THREAT TO US STRATEGY AND SUGGESTING THAT THE US ADMINISTRATION SHOULD ADOPT A CARROT AND STICK POLICY TOWARDS CHINA BY THREATENING TO CONTROL ARMS SALES BY CANCELLING MFN STATUS. IT SPECIFICALLY MENTIONED THAT ON 29 MAY THE US HAD PRODUCED A PLAN FOR ARMS CONTROL IN THE MIDDLE EAST, AND THEN ON 30 MAY ANNOUNCED A US DOLLAR 700 MILLION ARMS SALE
TO ISRAEL.
3. THIS WAS FOLLOWED ON 13 JULY BY ANOTHER SIGNED ARTICLE SAYING THAT CONGRESS' DECISION WAS A DANGEROUS SIGNAL'. IT CRITICIZED SOME AMERICANS AS WISHING TO USE THE MFN ISSUE AS A MEANS OF REFORMING CHINA. THE ARTICLE STRESSED THAT REMOVAL OF MFN WOULD BE DETRIMENTAL TO US INTERESTS IN CHINA: THE US WOULD LOSE THEIR CHINA EXPORT MARKET, LACK OF CHINESE IMPORTS WOULD HURT THE US CONSUMER, AND U S-INVESTED FIRMS IN CHINA WOULD SUFFER.
IT THREATENED THAT, IF MFN STATUS WERE REMOVED, U S FIRMS IN CHINA WOULD HAVE TROUBLE IN BUYING RAW MATERIALS AND SELLING THEIR PRODUCTS. THE USUAL FIGURES WERE PRODUCED TO SHOW THAT THE TRADE DEFICIT WAS NOT AS GREAT AS THE US CLAIMED.
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COMMENTS OF CHEN GUOQIANG
PRESS COUNSELLOR AT THE CHINESE
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