TNAG-2750-FCO40-3965-Most-favoured-nation-status-for-China-Hong-Kong-interests-1993 — Page 68

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Deputies are meeting to discuss how the Administration should proceed - whether by Executive Order or legislation and to agree what conditionality there should be. It is expected that they will decide to go for an Executive Order as this will give the Administration more flexibility. It is unlikely that the Deputies will finalise the package on 19 May, but the Administration hope to soon. The timing of the Secretary of State's visit is therefore particularly apposite. The Administration believe that Congress (and Congresswoman Pelossi) will accept an Executive Order providing the conditions set are a credible attempt to address Congress's

concerns.

6.

When the Governor visited the US from 2-8 May in private contacts with the Administration and Congress he argued forcefully against linking China's performance on the Hong Kong 1994/95 election issue with MFN. Senator Pelossi said publicly in response that she was prepared to drop this condition from the Bill.

7.

8.

Australia, as MTCR chair, recently explained to the Chinese Embassy in Canberra the importance that MTCR partners placed on China's continued adherence to MTCR guidelines. joint MTCR demarche in Beijing is planned before 31 May.

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State

9. Contact with the National Security Council on 18 May revealed that the Administration share our assessment that the Chinese have made deliveries of M-11 missiles to Pakistan. State have been tasked to determine whether the Chinese have violated the US Missiles Sanctions Act which tightly circumscribes the Administration's possible responses. said the US was hoping to establish a mechanism to handle discussion of contentious issues like human rights and non proliferation. They would propose to the Chinese a working group once the MFN decision had been taken. If the Chinese agreed, the US would use it to find a way of avoiding sanctions.

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