Kong's infrastructure, strategic location, and cultural ties

throughout the region make it an indispensable hub.

4) Finally, American interests are not simply economic, but

they also embody the desire to foster participatory and

pluralistic forms of social organisation devoted to free markets

and civil rights. On this score, Hong Kong gradually is moving

in the participatory direction. This is a development fully

compatible with our interests and values.

Current Trends and Developments in Hong Kong and Implications for

America.

In the wake of the tragic bloodshed of June 4, 1989 in

Beijing, confidence in Hong Kong reached a nadir, with emigration

jumping from 42,000 in 1989 to 62,000 in 1990. By 1991, the outflow had receded a bit, to 60,000 annually, with the rate

anticipated to remain at about that level in 1992.

This brain

drain is extremely worrisome, although there are indications that some previous emigrants are returning, having acquired rights of residence elsewhere, should such a life preserver prove

necessary.

Nonetheless, in 1991 American visas that remain valid until

the year 2,002 were undersubscribed, an indication that some measure of confidence had returned to the Territory.

In

addition, in 1991 and early 1992, the price of residential

property rose very rapidly in the Territory and the Hong Kong

stock markat rosa sharply.

Hong Kong expects a real growth rate

7

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