been involved for two years in annual review of China policy

through the vehicle of debate over most-favored-nation treatment

for the PRC. Given the nature of this debate, Hong Kong has

already become an issue. There secas to be little need for

additional review of Hong Kong separataly, a review that might

lengthen the discussion of China policy from a six-month to a

year-round preoccupation. Such continual discussion of China

policy might well further yeaken confidence in Hong Kong and in

the foreign business community.

In conclusion, Hong Kong is important to the United States,

it embodies zany values we hold dear, and it is appropriate that

Americans express their desire to see an internationally-

recognised agreement implemented faithfully. Further, it is in the interests of all parties that the United States put in place

the legal authority to assure that the July 1, 1997 transition

will not be made more difficult through unnecessary lapses in

legally constituted ties in important areas (whether it be civil

In aviation, extradition, mutual legal assistance, etc.). accomplishing these two tasks, however, ve should not inflame an already delicate situation by calling into question American

with acceptance of the Joint Declaration or the Basic Law. respect to reporting, this is the most problematic area in the proposed legislation and, on balance, it may hold more danger than gain for both the people of Hong Kong and the United States.

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