CRS-2
The American economic interest in Hong Kong is large, as the United
States is the colony's largest trading partner ($8.6 billion in 1982), and
its largest foreign investor (totaled $2.7 billion by 1982). Beijing leaders
also have explicitly linked their policy on reunification of Hong Kong with
the mainland with their policy on reunification regarding Taiwan. As a re-
sult, Americans are closely watching Hong Kong developments for clues as to
possible precursors to PRC policy toward Taiwan, where the United States has
important interests including legal ties under the Taiwan Relations Act. At
present, British and Chinese sensitivities over the Hong Kong issue appear to
compel the United States Government to adopt a low public posture regarding
the current talks. In the current context, within such a low profile mode
of operation, there also appear to be only a few limited options the United
States Government could adopt in order indirectly to influence the situation
to the advantage of American interests.
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