CONFIDENTIAL
FM PEKING
TO PRIORITY FCO
TELNO 1498
OF 280834Z OCTOBER 92
AND TO PRIORITY HONG KONG
176553 MDLIAN 1237
CONFIDENTIAL
HAB 091/2
TOP COPY Q DIST?
INFO PRIORITY WASHINGTON, ACTOR
78
Pa
YOUR TELNO 1523 TO HONG KONG AND WASHINGTON TELNO 2338 TO FCO: CHINA/MFN: LOBBYING A CLINTON ADMINISTRATION
1. WE HAVE NOT YET SEEN A COPY OF FAX REFERRED TO IN PARA 1 OF
TUR.
HOWEVER, CHINA'S MFN STATUS IS AN ISSUE THAT FREQUENTLY COMES UP IN OUR CONTACTS WITH THE AMERICANS HERE.
2.
WE ARE NOT SURE HOW THE MFN ISSUE WOULD BE AFFECTED BY CHINA'S GATT APPLICATION. THE STATE DEPARTMENT LINE IN SECOND TUR NOTWITHSTANDING, THE US EMBASSY SAY THEIR UNDERSTANDING IS THAT IF CHINA'S ENTRY TO GATT WAS OFFICIALLY TERMED AS REACCESSION (RATHER THAN ACCESSION FOR THE FIRST TIME) THE JACKSON-VANIK PROVISIONS WOULD NO LONGER APPLY. IF, HOWEVER, THE PRC WAS REGARDED AS ACCEDING TO GATT FOR THE FIRST TIME (WHICH WOULD NOT OF COURSE BE ACCEPTABLE TO THE CHINESE), THEN THE PROVISIONS WOULD STILL APPLY, UNLESS THE AMERICANS DECIDED TO CONSIDER CHINA IN FUTURE AS A MARKET ECONOMY, NOT A SOCIALIST ECONOMY.
3.
ASSUMING THAT MEN DID CONTINUE TO BE REVIEWED ANNUALLY ANY OR ALL OF THE PROVISIONS SUGGESTED IN TUR COULD IN THEORY BE INCORPORATED INTO THE DRAFT OF AN MFN BILL. HOWEVER, THE US EMBASSY HERE POINT OUT THAT THE ADDITION OF SPECIAL PROVISIONS TO THE BILL WOULD ADD TO ITS COMPLEXITY AND OPEN THE WAY FOR YET MORE AMENDMENTS DURING DEBATE.
4. IN PRACTICE THE LEAST FEASIBLE OF THE OPTIONS IN FIRST TUR WOULD BE TO EXCLUDE SPECIFIC PROVINCES FROM THE BILL. THE AMERICAN AUTHORITIES WOULD BE POORLY PLACED TO VERIFY THE TRUE ORIGIN OF CHINESE EXPORTS. ALSO, WHILE GUANGDONG, FUJIAN AND HAINAN ARE THE PROVINCES WHICH HAVE ADVANCED FURTHEST TOWARDS A MARKET ECONOMY, OTHER PROVINCES ARE NOW MAKING RAPID PROGRESS IN THIS RESPECT AND HAVE ENACTED THE SAME SPECIAL POLICIES TO ATTRACT FOREIGN INVESTMENT AS THE SOUTHERN PROVINCES. IT MIGHT BE DIFFICULT TO ARGUE FOR THESE THREE PROVINCES ALONE. IN ANY CASE, AS HONG KONG IS THE NUMBER ONE INVESTOR IN ALMOST ALL AREAS OF CHINA SUCH A
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