capacities as a service centre with its legal system at the core that has enabled the territory to act as both initiator, participant and facilitator of this triangular network - often referred to particularly in the United States as 'Greater China.'
In fact the emergence of 'Greater China' is of international significance. It already ranks as the third largest trading partner of the United States after Canada and Japan and it is the principal cause of the sudden eruption of huge deficits in the American trade with China, and by the same token, a reduction in the US trade deficits with Hong Kong and Taiwan. If American pressures on Hong Kong may have been reduced as a result, Hong Kong has become more intimately implicated in the fortunes of Sino-American economic relations. Not surprisingly, successive Hong Kong governors and the Hong kong Economic and Trade Office in Washington have engaged in lobby politics in favour of China retaining MFN status. Despite Beijing's insistence on retaining unto itself exclusive control over foreign affairs and defence it has not objected to HK's foreign political activities. Neither has it raised any difficulties regarding Hong Kong's articulation of its separate voice in bodies such as the Pacific Economic Cooperation Council (PECC), the Asia Pacific Economic Cooperation forum (APEC), or the GATT. Beijing has also raised no objections to the operations of Hong Kong's various Economic Trade Offices even though some of them, as in Japan, deal with host governments. Beijing officials
officials do not accuse them as being essentially British representatives (as is their habit from time to time in Sino-British negotiations) presumably because they recognize that it is not in their interests to do so. China is clearly benefitting from its growing economic engagement with the Asia-Pacific in which Hong Kong is playing an ever more important
role.
Hong Kong 's role in 'Greater China' has also enhanced its significance in the complex relationship between Beijing and Taipei. There has long been a link in the view of Beijing as Deng Xiaoping's formula of 'one country two systems' is meant to apply to both the other entities. But HK's role as a facilitator of links between Taiwan and the mainland has sharpened Taiwanese interest in the territory. The harsh treatment of Governor Patten and his proposals for widening HK's electorate intensified the popular rejection of Beijing's proposals for reunification and it was a factor in increasing the
the vote for the opposition Democratic Progressive Party in the December 1992 elections. The fact that delegates from Taiwan and the PRC met in Singapore in April 1993 and reached some agreements about the modalities of the exchanges across the Taiwan Straits is a moderating influence on how Beijing treats Hong Kong.
The current circumstances affecting Beijing's approach towards Hong Kong have changed significantly since the lead up to the Joint Declaration. Deng Xiaoping's ultimatum of 1983 to impose a unilateral settlement if an agreed one was not forthcoming was entirely credible then. That was reflected in the plunge in the value of both the currency and the stock market.
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