TNAG-1241-FCO40-1554-Future-of-Hong-Kong-1983 — Page 111

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The American economic interest in Hong Kong is large, as the United

States is the colony's largest trading partner ($8.6 billion in 1982), and

its largest foreign investor (totaled $2.7 billion by 1982). Beijing leaders

also have explicitly linked their policy on reunification of Hong Kong with

the mainland with their policy on reunification regarding Taiwan. As a re-

sult, Americans are closely watching Hong Kong developments for clues as to

possible precursors to PRC policy toward Taiwan, where the United States has

important interests including legal ties under the Taiwan Relations Act. At

present, British and Chinese sensitivities over the Hong Kong issue appear to

compel the United States Government to adopt a low public posture regarding

the current talks. In the current context, within such a low profile mode

of operation, there also appear to be only a few limited options the United

States Government could adopt in order indirectly to influence the situation

to the advantage of American interests.