```

[Congressional Record Volume 141, Number 82 (Wednesday, May 17, 1995)]
[Senate]
[Pages S6827-S6828]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                         ADDITIONAL STATEMENTS

                                 ______

                               HONG KONG

 Mr. THOMAS. Mr. President, I would like to address comments 
made in the last few weeks by two officials of the Government of the 
People's Republic of China regarding the United States and Hong Kong. 
First, as reported by Hong Kong radio and Nanhua Zaobao, Mr. Lu Ping, 
the Director of the PRC's Office of Hong Kong and Macau Affairs, told a 
delegation of American businessmen in Beijing that he believes there is 
a lack of understanding in the United States regarding Beijing's 
attitude towards Hong Kong. Second, Foreign Minister Qian is quoted in 
the April 24 issue of Beijing Review as stating that the United States 
has no interest in Hong Kong sufficient to justify the attention we pay 
to the area. I am dismayed that they have reached this conclusion for 
two reasons. First, because I believe that the United States is all too 
cognizant of Beijing's attitude towards the colony and has tried to 
make that cognizance known; and second, because it demonstrates to me 
that Beijing does not really understand what our concerns are.
  At the outset, let me state that I do agree in part with Minister 
Qian. Before the scheduled revision in 1997, Hong Kong affairs are a 
matter of concern primarily to Great Britain and the PRC; after 1997, 
they become a matter of concern primarily to Beijing. It is not our 
intent to instruct either London or Beijing on how best to accomplish 
that reversion, or on what role Hong Kong should play as a reclaimed 
part of greater China after 1997.
   This does not mean however, that I agree with what appears to be 
Minister Qian's correlative argument: that other countries therefore 
have absolutely no role whatsoever to play before or after 1997.
   As I previously noted in a statement about Hong Kong on the floor on 
April 3, the United States is keenly following developments in Hong 
Kong. This interest has two principle sources. First, we have a 
tremendous stake in the future economic and political stability of Hong 
Kong after reversion. Second, how the PRC handles this transition has 
far-reaching implications for our bilateral relations--and in some of 
China's multilateral relations which include us--in other important 
arenas. Let me address these in turn.
  Our economic ties to the present Colony of Hong Kong are substantial. 
Hong Kong is our 13th largest trading partner--7th in terms of 
agricultural trade. In 1994, two-way merchandise trade topped $21 
billion; U.S. exports accounted for over $11 billion. There are more 
than 1,000 United States firms with a presence in Hong Kong, of which 
about 370 have their regional headquarters there. At the beginning of 
1994, United States direct investment in Hong Kong on a historical cost 
basis was approximately $10.5 billion.
  This strong economic tie is facilitated--in fact, made possible--by 
Hong Kong's friendly business climate, a stable government, an 
independent judiciary firmly rooted in the rule of law and a vibrantly 
free press. It is clearly a tie we have a very strong motive for 
[[Page S6828]] maintaining in its present form. And thus, it is from 
this point of view that we take an active interest in Hong Kong affairs 
now, and will most likely continue to take in the post-1997 world. How 
faithfully the PRC adheres to the Sino-British Joint Declaration and 
the Basic Law is of importance to us because of the impact such 
adherence--or lack thereof--might have no these specific areas, and, in 
turn, on our economic stake.
  These are the logical steps that our Chinese friends do not seem to 
follow. I think their failure is best illustrated by an article in the 
May 8 edition of the Hong Kong Chinese-language newspaper Wen Wei Po--a 
newspaper with close connections to the PRC. In commenting on a speech 
by the United States Consul General in Hong Kong, the newspaper 
reported:

       In his speech, Mr. Mueller said that the United States not 
     only has tens of thousands of citizens, over 1,000 companies, 
     and tens of billions of dollars of investments in Hong Kong, 
     but also exports billions of dollars' worth of products to 
     Hong Kong. These facts, he noted, show that maintaining and 
     developing economic and trade relations with Hong Kong is 
     conductive to safeguarding the common interests of Hong Kong 
     and the United States, this being indeed the point Mr. 
     Mueller was trying to make. What is strange is that Mr. 
     Mueller suddenly shifted from economic topics to topics such 
     as democracy, the legal system, and human rights in Hong Kong 
     * * * . (emphasis added).

  So, let me explain simply how desiring to safeguard our economic 
interests triggers a concomitant interest in those topics. If the PRC 
cannot or does not firmly establish and safeguard a local independent 
judiciary in Hong Kong after 1997, then businesses will become 
skittish, pull out of the area, and the economy will suffer. If the 
civil and human rights presently available to Hong Kong citizens are 
not safeguarded, and are instead limited to reflect those presently 
available to citizens on the mainland where the government is not known 
for its sterling democratic reputation, then businesses will become 
skittish, pull out of the area, and the economy will suffer. If the 
present orderly and stable bureaucracy is replaced by one such as that 
currently in vogue in provinces like Guangdong where family or party 
connections and a large amount of renminbi are more important than the 
rule of law, then businesses will become skittish, pull out of the 
area, and the economy will suffer.
  We understand very well the PRC's verbal pronouncements that 
everything is fine and will remain so after 1997. But as I pointed out 
after the visit here of Lu Ping, to be credible and
 calming those pronouncements need to be backed-up with substantive 
actions. So far, in some areas, that has not been the case, and it this 
lack of substantive assurances that concerns us. Let me illustrate.

  A free press is one of the elements essential to Hong Kong's future 
as a center of international trade and finance. China has spoken about 
maintaining freedom of the press, but we have seen growing signs of a 
move to chill the colony's traditionally raucous press--a press which 
has been quite even-handed at denouncing Beijing and London, but has 
denounced Beijing nonetheless. There have been declarations that the 
PRC will not allow Hong Kong to become a ``nest of subversives''--which 
in the PRC's lexicon could well include free-minded members of the 
media. The PRC's Ministry of Public Security recently confirmed that it 
has been gathering information on Hong Kong citizens who are ``against 
the Chinese government.'' The PRC also tried in secret Hong Kong 
reporter Xi Yang and sentenced him to 12 years in prison for ``stealing 
state financial secrets''--a term which could include such simple 
figures as production levels of consumer goods, provincial GDP's, etc. 
Finally, there were the not-so-coincidental hostile actions taken by 
the PRC against the Beijing commercial establishments of Hong Kong 
publisher Jimmy Lai after Lai published an open letter critical of Li 
Peng.
  A continuation of the present common law, independent judiciary is 
another element of Hong Kong's continuing economic success after 1997. 
Businesses feel secure if they know that any commercial dispute in 
which they may be involved will be determined using settled points of 
law adjudicated by jurists beyond the influence of local politics or 
influence. The PRC has promised a continuation of this system, but 
again their actions speak louder to us. Beijing has failed to endorse 
the Hong Kong Government's draft legislation designed to implement the 
Court of Final Appeal; failure to do so soon may leave the Hong Kong 
SAR without such a court for the critical period just after 1997. 
Moreover, China's past commitment to the rule of law has been very 
spotty at best. Although a signatory to the International Convention on 
Arbitration, the PRC has blatantly violated that accord by allowing a 
Shanghai firm to refuse to pay an arbitral award against it in favor of 
a U.S. concern named Revpower. China is a signatory to several 
agreements concerning intellectual property rights, but their 
compliance until lately was almost nonexistent. The terms of contracts 
in general in China appear to be binding on the foreign firm, and 
fungible as far as the Government is concerned--witness the recent 
unilateral breaking of McDonald's lease for a site on Tiananmen Square 
with which my colleagues are no doubt familiar.
  Aside from our specific interest in these specific issues and the 
ramifications they will have for Hong Kong's future, how the PRC 
handles this transition also has implications in other non-Hong Kong 
specific arenas. How well the PRC keeps to their word will, I think, 
demonstrate their dependability as they seek to accede to the WTO and 
other similar organizations. Moreover, it will serve as an indicator as 
to whether the Chinese are serious about their own commitments to 
foreign investors, and will be a signal to those considering future 
investment.
  Mr. President, on May 25 the Subcommittee on East Asian and Pacific 
Affairs, which I chair, will hold a hearing on this topic entitled 
``Hong Kong: Problems and Prospects for 1997.'' I look forward to 
hearing from several Hong Kong specialists about the present state of 
the transition, where the problem areas are, and what they think the 
prospects are for the continuation of the colony's present economic 
prosperity after 1997.
  In closing, let me reiterate that we are not seeking to meddle in 
Great Britain and China's purely bilateral affairs. But, where the 
actions of either party might effect the business climate in Hong 
Kong--and thus international investment--I believe that we have a 
legitimate reason for showing interest, and the parties can be sure 
that we will. This is our message to Beijing.

                          ____________________
```