(PM's Internew with USA Today)

HONG KONG

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Pr. Medings,

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-9 FEB 1303

Zalety

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The agreement we have with China provides that by 1997 Hong Kong will have an elected legislature. So our disagreement with China is not about the principle but about timing and details of broadening democracy. We and China both have a strong interest in seeing Hong Kong continue its success story. We want to discuss the democracy question with China

so that we can ensure as smooth a transition in 1997 as

possible.

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Our agreement with China

-

which is registered at the UN

says that Hong Kong's way of life will continue unchanged for

We will be working to ensure that this agreement is fully implemented.

50 years.

The US is enormously important as an economic partner for Hong Kong. You are the second largest investor as well as a large trading partner. Hong Kong lives by free trade and the best

role for the US to play is to ensure that trade continues to flow and markets remain open.

One practical step of great significance to Hong Kong would be for the US to maintain China's Most Favoured Nation status for

trade purposes. That, in practice, leaves it on a par with almost all other countries and ensures that trade involving Hong Kong will not be slashed.

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