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She said the impact of MFN withdrawal on Hong Kong was severe as it would bring about
61,000 to 86,000 job lost; and
GDP growth curtailed by between 2 and 2.8 per cent.
"We can ill afford such an economic blow in this critical year of our transition.
"And as MFN is a trade matter, our consistent position is that it should not be used as a tool to deal with non-trade issues.
"So whilst we appreciate the interest in Hong Kong's future, we do not think it is a good idea to link Hong Kong's transition to the renewal exercise," she said.
The Chief Secretary also took the opportunity to correct some of the fallacies surrounding the territory's autonomy,
The first fallacy is "that our law enforcement system would not stand the change in our status".
Mrs Chan stressed that Hong Kong was committed to exercising the highest level of control in illegal activities, both local and international.
Hong Kong's systems were backed up by comprehensive laws which would straddle 1997, and they would be implemented effectively and professionally, without fear or favour, she added.
"The Joint Declaration and the Basic Law provide a firm foundation for the co- operation between Hong Kong's law enforcement agencies and their counterparts."
On the second fallacy, "that we shall not be our own master in international trade fora", Mrs Chan pointed out that "this simply ignores the fundamental fact the Hong Kong's trade policies and practices are, and will remain, quite distinct from China's.
"Contrary to what rumours have it these days, we will continue to be our own spokesman in the World Trade Organisation and Asia Pacific Economic Cooperation," she said.
The Chief Secretary also assured the audience that Hong Kong would enjoy a high degree of autonomy in all spheres of activities other than in foreign affairs and defence, as stated in the Joint Declaration and the Basic Law.
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