TNAG-2244-FCO40-3225-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 177

Tuesday 9 July 1991

(Answered by the Prime Minister on Tuesday 9 July)

Si Thomas smord's

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То ask the Prime Minister, if he will make statement on the Government's position regarding the renewal by the United States Government of China's Most Favoured Nation status.

UNSTARRED

No.

THE PRIME MINISTER

Renewal by the United States Government of Most Favoured Nation

Status for China is of great importance to Hong Kong. We hope that both the House of Representatives and the Senate will give

their support to this measure.

Hong Kong's economу is now inextricably linked with that of

China. More than two-thirds of Chinese exports to the United

States are routed through Hong Kong. It has been estimated that

non-renewal of China's MFN could result in a loss of some 43,000

Hong Kong jobs, a drop of up to a half in Hong Kong's current GDP

growth and a loss of US$9-12 billion in trade. American

commercial interest and investment in Hong Kong would also be

adversely affected.

There have been some calls for renewal to be made subject to

conditions. But this too would be

be bad for Hong Kong. The

resulting uncertainty would be a major disincentive to investment

in Hong Kong.