TNAG-2608-FCO40-3799-International-support-from-the-USA-regarding-the-future-of-H-1992 — Page 143

CONFIDENTIAL

072553

MDHIAN 21121

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ACCUSATION OF SELLING HONG KONG SHORT, AND KOWTOWING TO THE CHINESE. IT WOULD ALSO AS YOU SAY INFURIATE MARTIN LEE, AND DISCREDIT OUR ATTEMPTS TO GET THE HONG KONG ANGLE REFLECTED IN THE

ANNUAL MFN RENEWAL DEBATE.

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FOR THE TIME BEING, THEREFORE, IT WOULD BE BETTER TO WAIT AND SEE IF THE ADMINISTRATION IS SUCCESSFUL IN ITS ATTEMPTS TO AMEND THE BILL. WE SHOULD, OF COURSE, ENSURE THAT THEY ARE AWARE OF OUR POSITION. STATE HAVE TOLD US THAT, FOLLOWING CONTACTS IN HONG KONG AND LONDON, THEY THINK THEY HAVE A CLEAR UNDERSTANDING OF OUR CONCERNS. BUT IF THERE ARE ANY PARTICULAR POINTS TO EMPHASISE IT WOULD BE USEFUL TO FEED THEM IN NOW. WE CAN SUPPLEMENT CONTACTS WITH THE ADMINISTRATION WITH DISCREET APPROACHES TO TRUSTED CONGRESSIONAL STAFFERS (SOME OF WHOM WILL UNDOUBTEDLY ASK FOR OUR VIEWS), IN THE HOPE OF SPREADING THE WORD WITHOUT APPEARING TO MOUNT AN ACTIVE LOBBYING CAMPAIGN.

5. IF THE ADMINISTRATION SUCCEED IN NEGOTIATING AN ACCEPTABLE TEXT WITH MCCONNELL THEY WILL TALK TO US, HKG AND THE CHINESE ABOUT OUR

THEY ARE, OF COURSE, PARTICULARLY WORRIED ABOUT THE CHINESE. THEY BELIEVE THE CHINESE HAVE OVER-REACTED TO THE BILL OUT OF A NEURALGIC FEAR OF INTERNATIONALISATION, AND THAT IF THE CHINESE PAUSE TO CONSIDER THEY WOULD REALISE THAT THE BILL POSED NO DIRECT THREAT TO THEM. IF THE ADMINISTRATION SUCCEED IN CHANGING THE REPORTING REQUIREMENT, THEY HOPE TO BE ABLE TO ARGUE WITH THE CHINESE THAT THE TEXT IS ENTIRELY CONSISTENT WITH THE JOINT DECLARATION, AND MAKES SENSIBLE PROVISION FOR THE US TO CONTINUE TO RECOGNISE THE SPECIAL STATUS FOR HONG KONG WHICH THE JOINT DECLARATION ESTABLISHES.

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WE RECOMMEND THAT LORD CAITHNESS EXPLAIN TO THE CHINESE AMBASSADOR THAT, ALTHOUGH THE BILL IS GATHERING MOMENTUM, ITS PROSPECTS ARE NOT YET CLEAR. THE ADMINISTRATION INTEND TO TALK TO ITS SPONSORS TO TRY TO INTRODUCE AMENDMENTS WHICH WOULD MAKE IT MORE PALATABLE. THEIR HOPE IS TO EMERGE WITH SOMETHING WHICH IS ENTIRELY CONSISTENT WITH THE JOINT DECLARATION. IT WOULD BE BETTER TO WAIT AND SEE HOW THE TEXT EMERGES FROM THE ADMINISTRATION'S TALKS WITH MCCONNELL BEFORE DECIDING HOW TO REACT.

RENWICK

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