TNAG-2468-FCO40-3592-Most-favoured-nation-status-for-China-Hong-Kong-interests-1992 — Page 119

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MDLIA 4614

INTERMINGLING OF ACTIVITIES BETWEEN THE STATE AND PRIVATE SECTORS IN CHINA, IT IS IMPOSSIBLE TO BE CERTAIN WHICH CHINESE EXPORTS WOULD BE CONSIDERED AS ORIGINATING FROM 'STATE-OWNED ENTERPRISES'. MOREOVER, THE CHINESE GOVERNMENT HAS NOT PUBLISHED ANY STATISTICS ON EXPORTS BY STATE-OWNED ENTERPRISES, HOWEVER DEFINED.

4. IN VIEW OF THE ABOVE, WE CANNOT QUANTIFY OR EVEN ATTEMPT A GUESSTIMATE OF THE POSSIBLE DAMAGE THAT MAY BE CAUSED TO HONG KONG BY THE TARGETING PROVISION. NOR ARE WE SURE WHETHER STATE- CONTROLLED CHINESE EXPORTS TO THE US REMAIN MORE VALUABLE THAN PRIVATE SECTOR EXPORTS, ALTHOUGH OUR ECONOMISTS THINK THIS RATHER UNLIKELY.

5. THE ASSISTANT UNITED STATES TRADE REPRESENTATIVE IN RECENT CONGRESSIONAL HEARINGS STATED THAT THE CHINESE GOVERNMENT AT ALL

LEVELS HAS HEAVY INVOLVEMENT IN THE MANUFACTURING AND DISTRIBUTION OF CHINESE PRODUCTS, THAT IT WOULD BE VERY DIFFICULT TO DETERMINE WHICH PRODUCTS ARE FROM STATE-OWNED ENTERPRISES AND THAT THE TWO BILLS ARE, THEREFORE, UNWORKABLE. WE SHARE THIS

VIEW.

PATTEN

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ΜΑΙΝ

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.ASIA/PACIFIC ECONOMIC

ERD

ECD (E)

ECONOMIC ADVISERS

FED

HKD

JOINT DIRECTORATE

NAD

PLANNERS

SEAD

ADDITIONAL

5

DTI//HD/EEP MR COOKE

DTI//OT4 MR HAMPTON

DTI//OT2 MR LOVE

HMT//IF MR P SEDGEWICK

NNNN

DISTRIBUTION

80

SPD

PS

PS/MR GOODLAD

PS/MR HOGG

MR CROWE

SIR J COLES

MR BEAMISH

MR HUM

MR BONE

MR MASEFIELD

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HMD//IF2 MR S HANKS