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Eugene Henderson

Europe aims to maintain prosperous trade and financial relationships with Hong Kong after the handover.

  Commercial ties between the European Union and Hong Kong are well established - the territory is the EU's 10th largest trading partner.

  Add to that the fact that half of all Europe's trade with China passes through the territory and it is easy to see why great importance is placed on promoting a harmonious future.

  With the European Union pushing for China's entry into the World Trade Organisation (WTO), the attitude among EU officials seems to be one of 'business as usual'.

  Hong Kong is home to 100 EU financial services companies and 100 manufacturers, while about 250 European firms have their regional headquarters in the territory.

  The EU is the third largest investor in manufacturing in Hong Kong, to the tune of US$1 billion, with Britain, the Netherlands and Germany the main participants.

 With more Europeans living in Hong Kong than any other Asian city, there is little doubt they and their companies have been attracted to the area by its traditions of openness and internationalism.

 According to Brian McDonald, Counsellor for Trade and Economic Affairs at the EU's Hong Kong office, confidence in those traditions remains strong.

  'All the signs are that confidence is not being affected. The market here is beginning to boom again so there doesn't seem to be any real hesitation on the part of the operators,' he said.

  'People have discounted the handover already and are acting as if it has taken place. We are very close, so this is the time you would expect doubts to occur, but none seem to have.'   Trade between the EU and Hong Kong stands at US$24-25 billion and with the markets of China opening, European businesses are full of anticipation.

  'Europe places a great deal of importance in Hong Kong for the future, both economically and as a regional centre for access to China,' Mr McDonald said.

  'China is the gateway to the world and it is a two-way street we are on.

  'Although China is not in the WTO, the European Union is hopeful the negotiations taking place will lead to concrete results in the not to distant future.'   The EU says it wants to see China at WTO meetings discussing not just trade but issues concerning the well-being of mankind, such as the arms trade, drug trafficking, poverty alleviation and the environment.

  A trade and co-operation agreement between the EU and Beijing was made back in 1985 and since then a long-term relationship has developed which is central to the EU's strategy in Asia.

  The importance of it was significantly boosted by talks held at last year's Asia-European Meeting (ASEM) in Bangkok.

  Now, the EU expects Hong Kong to become an international and open city of China.

  'We are confident things will go smoothly, in other words the rule of law will be maintained, the markets will remain free,' Mr McDonald said. 'It is also true confidence can be fickle and these things have to be preserved as they are important elements in the preservation of the continued prosperity of Hong Kong.

  'There's a grey area where politics and economics meet, but it is important that grey area be managed properly. We hope and believe it will.' 



Links set to get stronger beyond '97