To Protect Hong Kong, Preserve China's MFN Status

TRADE AND HUMAN RIGHTS

With the July 1, 1997, return of Hong Kong to China a little more than a year away, Beijing is abuzz with activity. The Red First Regiment has learned a song titled, "I Love You, Hong Kong"; Lu Ping, the Chinese director of the takeover, drives a car with a license plate that reads "1997." In nearby Hong Kong, spirits are far more sober.

Last week the British governor of Hong Kong, Christopher Patten, was in Washington to lobby Congress to drop its threats to withdraw China's most-favored-nation (MFN) status. Given Hong Kong's enormous stake in the Chinese economy, an American withdrawal of China's MFN status would have devastating effects on Hong Kong at a time when stability is at a premium.

Nevertheless, many members of Congress on both sides of the aisle are hungry to punish Chinese intransigence. It is important that these same members realize that if MFN is withdrawn, Hong Kong will be caught in the crossfire. If Congress truly has Hong Kong's interests in mind, it will listen to Mr. Patten and drop its threats of withdrawing MFN.

If the health of Chinese-Hong Kong relations is not persuasive enough, perhaps Congress should bear in mind the American stake in Hong Kong. On a cost basis, US investments in Hong Kong are valued at $12 billion. Today American companies employ nearly 10% of the local work force. And despite more than 150 years of British rule, the 36,000 Americans on the island surpass the number of British residents.

East-West crossroads

Patten put it best last month when he described Hong Kong as "the sort of Asia that America wants to see: open markets and minds." Indeed, at a time when US relations across Asia are increasingly called into question, Hong Kong is an exceptional example of the possibilities of cooperation between East and West.

Rather than punishing China, Congress should move to support Hong Kong. The prospect of transferring this island from a British territory to a Special Administrative Region under Beijing's control leaves many questions unanswered. Indeed, Britain and China have not even agreed on how to stage a joint ceremony to mark the occasion.

The US need not merely sit on the sidelines and watch as events unfold. Both Congress and the White House can take concrete steps to promote American interests by helping to ensure Hong Kong's future stability.

First, as detailed in the US-Hong Kong Policy Act of 1992, the secretary of state must provide Congress with a thorough assessment of conditions in Hong Kong. With the next such report due in March 1997, the State Department will have the opportunity to make its case regarding Hong Kong each year through 2000. These reports offer a highly publicized means for any US administration to monitor the Chinese application of the "one country, two systems" concept.

Fending off corruption

Second, the United States, with the support of its allies, should press for the utmost transparency on all levels of government during and after this transfer of power. With the world watching, transgressions will be far less likely. Many Hong Kongers rightfully worry that with Chinese sovereignty comes Chinese corruption. In recent years, Hong Kong's Independent Commission Against Corruption (ICAC) has played a crucial role in stemming this tide domestically. After the handover, it will be essential that bodies such as the ICAC have the independence to monitor mainland-owned companies operating on the island.

Third, providing a safe exit for the people of Hong Kong may go a long way toward deterring Beijing's repression. It is no secret that the colony's success is due largely to its highly productive work force. If Hong Kongers are free to leave, China may be more likely to respect their rights.

Unfortunately, there is no possibility that Britain will grant citizenship to the colony's residents, as Portugal has done in Macao. While US immigration policy for residents of Hong Kong is already liberal, granting them visa-free access to the United States would provide an important second source of security, as well as send a powerful message to Beijing.

Few have been as persistent or outspoken in their criticism of Beijing as the governor of Hong Kong. Consistently, Patten has proven himself willing to stand up to the mainland. Nevertheless, he realizes at this important juncture that without a normal US-Chinese trade relationship, Hong Kong's very livelihood will be threatened, and its democratic hopes vanquished. In what was his last trip to Washington before the handover, let's hope his message was not lost on Congress.

During his trip to Hong Kong last March, British Prime Minister John Major declared to an enthusiastic crowd, "Hong Kong will never have to walk alone." In supporting President Clinton's renewal of MFN status for China, Congress should make the same pledge.