TNAG-2244-FCO40-3225-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 167

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MDLIAN 204

EMBASSY IN WASHINGTON, ALSO RECEIVED COVERAGE. ON 9 JULY IN AN ARTICLE IN THE WASHINGTON POST HE SUGGESTED THAT REMOVAL OF MFN STATUS WOULD CALL INTO QUESTION BEFORE THE REST OF THE WORLD THE RELIABILITY OF THE US AS A TRADING PARTNER. HE STRESSED THAT DESPITE THE END OF THE COLD WAR CHINA WAS SITLL STRATEGICALLY IMPORTANT.

COMMENT.

5.

THE CHINESE ARE STILL HOPEFUL THAT CONGRESS WILL NOT BE ABLE TO MUSTER SUFFICIENT VOTES TO OVERRIDE A PRESIDENTIAL VETO. HOWEVER THEY REMAIN VERY CONCERNED THAT SOME FORM OF CONDITIONALITY WILL BE IMPOSED. IN THE HARDENED IDEOLOGICAL CLIMATE OF THE 70TH ANNIVERSARY OF THE FOUNDING OF THE CHINESE COMMUNIST PARTY, SOME INTELLECTUALS ARE PREDICTING A MAJOR SPLIT WITH THE US IF MEN STATUS IS NOT RENEWED: THERE IS GENUINE WIDESPREAD SUSPICION THAT THE US IS SEEKING TO USE THE MFN ISSUE TO INFLUENCE THE PACE AND

DIRECTION OF CHINESE DOMESTIC POLICY.

MCLAREN.

YYYY

DISTRIBUTION

71

ΜΑΙΝ

71

MFN AND HONG KONG

LIMITED

HKD

NAD

NEWS D

RAD

PS

EAPD/ODA

ECONOMIC ADVISERS

ERD

PS/LORD CAITHNESS

PS/PUS

ESAU

SIR J COLES

ESED

MR BAYNE

FED

MR MILES

JOINT DIRECTORATE

MR BURNS

NNNN

2

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