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SCMP Reporter

THE historic change of sovereignty is just one of the shifts taking place on July 1. With Britain's retreat from its colonial jewel also comes a withdrawal from its natural role as international protector and guardian of Hong Kong's way of life.

 That role, analysts agree, has been handed squarely to the United States - and all eyes will now be on Washington whenever the international community wants a spokesman to articulate its views on Hong Kong and its future.

 In some ways, the US replacement of Britain as the global monitor of Hong Kong affairs has been subtly in progress for one or two years, with President Bill Clinton's administration being prodded by a large mass of members of Congress who have not shied from demanding the Government get and stay involved.

 London, eager to galvanise international interest in the transition, has been happy to see the US step into the breach.

 Statistics alone are enough to justify America's massive interest in Hong Kong's continued well-being. The Americans' human and economic links to the territory have long surpassed those of Britain.

 There are nearly 40,000 Americans resident in Hong Kong, as well as more than 1,000 US companies employing about one in 10 Hong Kongers.

 On the trade side, Hong Kong, with only 6.5 million people, is America's 11th largest export market, amounting to $14 billion (HK$108.26 billion) in 1995.

 Hong Kong holds the rare distinction of being an Asian trading partner with which the US has a trade surplus.

 Strategically, Hong Kong and its harbour are also important to US interests in the region - the testimony being the enormous effort the Pentagon has put into preserving naval ship visits.

 The city is also of vital importance to Washington in helping fight international crime since many of the world's drug traffickers, money launderers, intellectual property violators and alien smugglers continue to exploit it as a base for their operations.

 The stakes are high for the US to use all the diplomatic muscle of its superpower status to ensure Hong Kong fares as well under its new master as it did under Britain. And officials all the way up to Mr Clinton have raised the rhetorical notch during 1997, sending clear signals to Beijing that it will be watching the transition period closely.

 To James Lilley, former US ambassador to Beijing, America sees Hong Kong as a 'crucible for what happens in the 21st century'.

 But Mr Lilley's analysis makes it plain that despite the overriding economic interests, it is the political viewpoint which dominates Washington's thinking.

 'The question is, can you have a free market system along with a strong, authoritarian government, a la Singapore? That is the challenge,' he said.

 'The most important thing for the US is to defend US interests in Hong Kong. We must let China know US interests can only be defended with the rule of law and freedom of speech.'  Mr Clinton's own remarks, while stressing the commercial interests, have also placed an emphasis on the political. Hong Kong, he said earlier this year, is quite simply 'a litmus test' of how China will develop in the years to come as a member of the international community.

 The Hong Kong Government's line that the reversion should not become a football kicked around in the greater US-China relationship is a laudable one, but is not always heeded at a time when China issues are becoming ever more important in US domestic politics.

 The administration has, in line with its policy of stabilising relations with its comprehensive engagement strategy, maintained a studied, moderate public stance on Hong Kong even as it speaks out against developments it does not like.

 But the tone is altogether more strident in Congress, where Democrats and Republicans alike have rallied round the Hong Kong cause, often putting forward remedies which have Hong Kong's officials in Washington wincing.

 And according to Dr David Lampton, director of the National Committee on US-China Relations, that is especially true in the House of Representatives, where the two-year election cycle has members constantly with an eye on issues which resonate with voters.

 'Hong Kong will be an issue in American politics for a year or two at least,' Dr Lampton said.

 'Congressman Dick Gephardt [a potential challenger to Vice-President Al Gore for the presidency in 2000] is already looking for issues, and Hong Kong will be for people like him a test of China's behaviour in the world.'  Dr David Shambaugh, a China studies professor at George Washington University, said: 'My sense is that Congress is looking at one issue and one issue only: political freedoms. These are good indicators, but it is a very selective criteria.'  Experts agree the American public may not be getting the full picture on Hong Kong because media coverage tends to focus on issues such as civil liberties and the electoral system.

 With this in mind, China analyst Nicholas Lardy, of the Brookings Institution, said: 'I subscribe to the view the reversion is a process rather than an event.

 'It's the beginning rather than the end of the story.'  Analysts like Dr Shambaugh see some encouraging signs that China is aware of the need to recognise the validity of US interests - including a surprisingly strong agreement on future port calls by US warships, and another deal allowing the US Consulate to keep its size and shape, including a team of defence attaches the Pentagon is overjoyed to be able to retain.

 The cornerstone of US policy towards the Special Administrative Region is a 1992 piece of legislation called the Hong Kong Policy Act, enacted by a group of pro-Hong Kong members of Congress. It gives the administration a lot of leeway in its day-to-day relationship with Hong Kong, but binds the White House to keep track of whether Hong Kong is, as the Joint Declaration promises, allowed to operate with a 'high degree of autonomy'.

 The 1992 act is good news for Hong Kong, but within it looms the dark spectre of what may happen if things do not go the way Washington likes.

 The positive side is that the act requires Washington to give the territory separate status from China in crucial economic and law-enforcement areas. In this way, Hong Kong retains its own trade quotas with the US, its own investment agreements, its own extradition treaty, its own bilateral aviation deal, and its own export control regime.

 In this way too, America remains the central force in ensuring Hong Kong remains a distinct, international centre of commerce and culture.

 But should Mr Clinton determine the SAR has in any way lost its autonomy, the sanctions provided for in the act are nothing short of cataclysmic: he will, in short, be required to strip Hong Kong of its separate status from China.

 The analysts cannot agree on how the situation in Hong Kong will have to be for Washington to take such drastic action, but they agree the leverage it provides the US is too extreme.

 Dr Lampton said: 'The problem is, almost every tool we have available would hurt Hong Kong worse than [China].'  However, few Hong Kong watchers in Washington, and especially in the administration, believe Hong Kong's medium-term outlook is anything but bright.

 They have welcomed the selection of Chief Executive Tung Chee-hwa - and his reappointment of most senior civil servants and the naming of Andrew Li Kwok-nang as Chief Justice - as signs the SAR will be efficiently and independently managed.

 Although the American outlook precludes legislators and policy-makers from separating economic freedoms from civil liberties - and from lecturing the rest of the world on the issue - there is every sign Washington intends to give Hong Kong its full support as subtly and sensitively as it can.

 One strong line emerging from the administration is that Beijing can be trusted to preserve Hong Kong's way of life because it is in its interests to do so.

 By the same token, the US is certain to stay intimately involved in the SAR's affairs because it has so much money and human resources invested there.



Clinton lands role as new protector