TNAG-2752-FCO40-3967-Organisation-for-Economic-Co-operation-and-Development-(OECD-1994 — Page 62

21 October 1993

Mr T H Chau JP

CONFIDENTIAL

Secretary for Trade and Industry

2nd floor

Central Government Offices

Jear Snan,

-

MKB 091/3

2 NOV 1993

Office of the

(12)

British Senior Representative

Sino-British Joint Liaison Group

St John's Building, 3rd Floor

33 Garden Road

Hong Kong

Telephone: (852) 868 2171/2416/2435 Facsimile: (852) 868 2431

76

HONG KONG AND THE OECD

1. At lunch on 12 October you updated me on the situation regarding Hong Kong's proposed observership at the OECD Trade Committee. You asked me to look at our papers and to consider whether, on reflection, I shared Tony Galsworthy's concern that this should be a matter for consultation with the Chinese rather than for simply informing them (correspondence resting with his letter to you of 20 July).

2.

I have now looked at the papers and, as you know, I come to the subject with the advantage that I have served in the OECD and can therefore appreciate some of the background.

3. Frankly, I regard it as a matter of fine judgement whether this should be treated as a matter for consultation with the Chinese or simply for informing them. We need to bear in mind that the OECD is a rather different animal, both in genesis and in membership, to other international organisations, most of which are either universal or regional. The OECD is seen as "the rich man's club" and (although historically there have been exceptions) it is also the club of the industrialised democracies. Membership of or association with the OECD is therefore rather different to, for example, any similar relationship with the GATT or the ADB. I have always felt that, notwithstanding Hong Kong's economic autonomy, there could be some increased Chinese sensitivities to Hong Kong's association with the club of what traditionally have been the principal anti- Communist countries.

4.

Nevertheless, my firm recollection is that the Chinese were remarkably relaxed when Hong Kong began to participate in the late 1980s with the other NIEs (subsequently DAES and more recently NMES) in the dialogue exercise with the OECD.

/ as

(Indeed,

CONFIDENTIAL