TNAG-1238-FCO40-1551-Future-of-Hong-Kong-1983 — Page 69

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$2.7 billion. The United States is the major foreign direct investor in

Hong Kong's manufacturing sector with 47 percent of total investment, fol-

lowed by Japan with 30 percent. Out of Hong Kong's total two-way trade of

$44.5 billion in 1982, $8.6 billion of this was with the United States. The

United States absorbed 38 percent of Hong Kong's total domestic exports last

year, and as a supplier, the United States ranked third, after China and

Japan The American share of Hong Kong's import market was 11 percent last

year. U.S. businesses in Asia have long used Hong Kong as

a base of opera-

tions and a major transportation, communications and financial support center,

Hong Kong has loomed larger in U.S. considerations as American firms have

used the colony as a base in exploring the China market.

Americans interested in Beijing's future policy toward Taiwan have

also been following closely China's approach to Hong Kong for indications

as to how Beijing intends to deal with Taiwan. Thus far, Chinese spokesmen

have explicitly linked Beijing's approach on the two issues, though some

have added that while Beijing wants British administration to be replaced

by a "Chinese" one representing the "people" of Hong Kong, in the case of

Taiwan, the administration is already Chinese and, therefore, would not

have to be replaced.

If Beijing manages to reassert it sovereignty over Hong Kong without

disrupting the social and economic order there, it could add substantial

credibility to its claim that China's reunification with Taiwan would have

no negative effect on the way of life there and could thereby ease concerns

of some Americans about how U.S. interests in Taiwan would be affected by

reunification with the mainland. Of course, if Beijing is seen as mishandling