HONG KONG people who have obtained foreign passports should be allowed to renounce their Chinese nationality after 1997, it was suggested yesterday. Local National People's Congress deputy Liu Yiu-chu said China should adopt a set of clear, simple and reasonable procedures under which this could be done. 'At present, we don't know which [mainland] department is responsible for the application and renunciation of Chinese nationality. The work should be done as soon as possible,' said Ms Liu, a lawyer. China does not recognise dual nationality, and Chinese who have gained foreign nationality after staying abroad for a period of time automatically forfeit their Chinese nationality. There has been confusion over the status of Hong Kong permanent residents who hold foreign passports after 1997. Chinese President Jiang Zemin was quoted as saying at the weekend that Beijing was still considering how to deal with the issue. Mr Jiang indicated at a meeting with Canadian Prime Minister Jean Chretien that China would not accept Canadian passports as proof of citizenship, Canadian officials said. More than 100,000 Hong Kong people hold Canadian passports. In Osaka last night, Vice-Premier Qian Qichen said Hong Kong people with foreign passports who had worked abroad could be beneficial to the territory's economy. 'These people can still be permanent residents of Hong Kong after 1997,' he said. 'They may not be required to stay consistently in Hong Kong for a long time, but they may be required to declare whether they would like to keep their permanent right of residency or right of abode,' he said. Ms Liu said a set of principles was needed when there were conflicts over the nationality of those holding foreign passports. The director of the Chinese Foreign Ministry's Visa Office in Hong Kong, Dai Changshi, said one possible option for dealing with the 'extremely complicated' issue was to allow people to decide which nationality to retain. Discussion is under way at the Joint Liaison Group on the criteria under which emigrants who return to Hong Kong are eligible for permanent residency. Executive Councillor Felice Lieh-Mak said the conditions should not be too stringent. A Preliminary Working Committee sub-group has proposed emigrants can retain their permanent residency only if they return to the enclave before July 1, 1997. The South China Morning Post reported on Friday that Britain had agreed to the proposal. Professor Lieh-Mak said that if Hong Kong was to maintain its status as a financial hub it needed educated emigrants.