CONFIDENTIAL
1672
MDLOAN 3486
to Lose MFN as Leverage: stopping MFN would hurt Chinese entrepreneurs, Hong Kong, and US business. The Administration had tried to reduce the salience of MFN in the relationship by handling trade and non-proliferation on other channels and by creating a broader framework. This had won wide consent in the US, but the Chinese had been complacent. The Americans had had to press them to take the human rights conditions seriously. The Chinese were also inflexible. They felt that they were enjoying diplomatic and economic success. At the same time the jockeying for Leadership post-Deng made them cautious about concessions to the US.
5.
The US had therefore devised a strategy to engage the Chinese intensively in dialogue. An accumulation of problems M-11 missiles to Pakistan, the Yinhe incident, trade issues, human rights problems, CITES violations, perhaps soon the Three Gorges project Lent special importance to this. On 25 September he and Lake had met the Chinese Ambassador to hand over a non-paper and a Presidential letter. The gist was that the US considered the relationship to be important: current problems created the risk of a downward spiral which had to be avoided: they should therefore hold a series of meetings up to Cabinet Level and including military contacts: President Clinton and Jiang Zemin should have a bilateral meeting in Seattle: certain matters such as MFN conditions but also non-proliferation and trade were particularly urgent: the US could reassure China about its one-China policy. When Christopher and Qian met at UNGA, they agreed on this process. Shattuck had just visited China on human rights. Visits on agriculture and defence were proceeding. Tarnoff would visit 10 days before Seattle.
6. Ikeda (Japan) said that his country had three objectives: to make their bilateral relationship more mature, to engage China in international frameworks and to encourage economic reform. He was less pessimistic than the US and UK. Bilateral relations were quite stable. China had behaved well over Cambodia, quite well over North Korea. We should try to ensure that China would incur international costs if it behaved badly. Pressure could be effective as long as it did not go too far and stimulate a nationalist backlash. Japan regularly expressed concern on human rights. It believed that in the long run economic reform could bring political reform too.
7. Wallau (Germany) began with the effect of Tiananmen, which
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