TNAG-2347-FCO40-3416-Political-relations-between-Hong-Kong--Italy-and-China-1991 — Page 26

PERENCES

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A : Mr de Michelis' letter on European Community/China relations.

B :

Peking telno 850: Report on Mr de Michelis' visit to China.

BACKGROUND

A

B

1. Mr de Michelis has written to EC Foreign Ministers recommending

that the Twelve should raise the level of their consultations with

China and broaden economic and commercial cooperation. This

initiative follows his recent visit to China during which,

reflecting the Secretary of State's message, he emphasized the importance the EC attach to a positive outcome on Hong Kong.

It is not clear why Mr de Michelis thinks a new initiative is

necessary.

2.

Nor is it clear precitely what a new approach would entail, Although during his visit Mr de Michelis proposed a framework for regular high level (ie Head of State) political contact.

Mr Andreotti is to visit China in October (the first EC Prime

Minister to do so since June 89).

3.

Most EC countries are already rebuilding their contacts and cooperation with China. Troika Ministers met Qian Qichen at last

year's UNGA. Qian Qichen has visited a number of European countries including Portugal and Greece. The French and Spanish Foreign

Ministers, as well as Mr de Michelis, have visited China in recent

months. Most Community countries have resumed their economic and

technical cooperation with the provision of concessional finance,

export credits etc. Military links (ban on arms sales and

suspension of military cooperation) are the only area of EC dealings

with China still subject to formal restrictions. Italy itself has significant commercial relations with China. A new trade agreement

was signed at the end of May under which Italy is to provide $700

$800 million of concessional finance. More widely, cooperation

between the West and China on international issues eg Cambodia, arms

control has resumed.

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