XN000022-1994-03-07 — Page 2

MONDAY, MARCH 7, 1994

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POSSIBLE IMPACT ON HK IF CHINA LOST MFN STATUS

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THE GOVERNMENT ESTIMATED THAT, IF CHINA'S MOST FAVOURED NATION (MEN) TRADING STATUS WERE WITHDRAWN, HONG KONG MIGHT LOSE $133 BILLION TO $187 BILLION IN OVERALL TRADE: $19 BILLION TO $26 BILLION IN INCOME AND AROUND 54,000 TO 75,000 IN JOBS.

WERE

THE TRADE DEPARTMENT RELEASED TODAY (MONDAY) THE GOVERNMENT'S LATEST ASSESSMENT OF THE IMPACT ON HONG KONG'S ECONOMY IF CHINA TO LOSE ITS MFN TRADING STATUS IN THE UNITED STATES.

AT A PRESS CONFERENCE THIS AFTERNOON BY THE DEPUTY DIRECTOR- GENERAL OF TRADE, MR CHRISTOPHER JACKSON, AND A PRINCIPAL ECONOMIST FROM THE FINANCIAL LOCAL TRADE ASSOCIATIONS TRADING STATUS BY THE U.S. KONG'S RE-EXPORTS OF CHINA

SERVICES BRANCH, MR CHEUNG HOK-YING, WERE TOLD THAT REMOVAL OF CHINA'S MFN WOULD HAVE DIRECT ADVERSE EFFECT ON HONG ORIGIN TO THE U.S.

"A REDUCTION OF UP TO $77 BILLION WORTH OF RE-EXPORT IS DOUBLE THE IMPACT THAT WE ESTIMATED IN 1990", MR JACKSON SAID.

"THIS IS LARGELY THE RESULT OF THE VERY RAPID GROWTH IN HONG KONG'S RE-EXPORT OF CHINA-MADE GOODS TO THE UNITED STATES OVER THE PAST FEW YEARS.

THE WITHDRAWAL WOULD ALSO HAVE SIGNIFICANT ADVERSE EFFECT ON MANUFACTURING INVESTMENT VENTURES AND OTHER PRODUCTION ARRANGEMENTS BY HONG KONG AND FOREIGN COMPANIES IN CHINA.

PRESIDENT CLINTON IS REQUIRED BY U.S. LAW TO INDICATE BY JUNE 3 WHETHER HE INTENDS TO RENEW CHINA'S MFN STATUS FOR ANOTHER YEAR.

"WE HAVE SAID MR JACKSON.

STEPPED UP OUR LOBBYING ACTIVITIES IN

"WE HAVE

WASHINGTON,"

WORKING

WITH

REINFORCED OUR LOBBYING TEAM AND ARE AMERICAN BUSINESS ALLIES TO IMPRESS UPON MEMBERS OF THE ADMINISTRATION AND CONGRESS THE DAMAGE WHICH MFN WITHDRAWAL WOULD DO TO HONG KONG AND TO AMERICAN INTERESTS IN THIS REGION."

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