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SCMP Reporter

The intensifying attack on Beijing from the right wing of the US Republican Party may be seen as a particularly laughable piece of politically-loaded scaremongering, but few in Washington's Hong Kong business lobby are smiling.

 Senator Trent Lott warned in a recent letter to Defence Secretary William Cohen that the mainland's navy would soon control the 'strategic choke point' through Hutchison's ports at the Panama Canal's Atlantic and Pacific entrances.

 At issue was a 1997 contract with the Panama Government allowing Hutchison Whampoa's wholly owned subsidiary, Hutchison Port Holdings, to run container ports and which the company insists gives it no control over the canal itself.

 The White House, Pentagon and State Department were swift to rubbish the fears of Mr Lott - the most powerful figure yet to have a crack at Hutchison - adding that the United States had a stated right to intervene militarily if access was ever blocked.

 But the mere fact that such high offices had to speak up in the first place was worrisome enough, diplomats, businessmen and lobbyists warned.

  The fact too that such attacks seem so divorced from reality forms a key part of the wider problems facing Hong Kong's image in the wake of the handover, they added.

 Fears are building that Hong Kong and the commercial sector is increasingly being 'written off' in some political circles in Washington as merely part of the mainland - especially after being panned in the recent report by Congressman Christopher Cox on mainland espionage.

  Disturbingly, the SAR could yet find itself dragged into the circus of next year's presidential campaign.

 'If Hong Kong does swing into the sights it will be short and sharp and not very pleasant,' warned John Foarde, vice-president of the United States-China Business Council.

 'And then it will be forgotten.

 'It may not reflect any sort of reality as we know it, either. The nuance of Hong Kong's commercial independence could struggle to surface.

 'I'm not overly worried at this stage, but certainly the situation should be kept a close eye on.'  Other lobbyists said the key threat would be a decision from some Republican factions to have a final crack at President Bill Clinton and use his record with Beijing as a weapon.

 'Some of these groups are really quite rabid when it comes to any perceived national security interest and the prospect of a further attack on Clinton,' a lobbyist said.

 'Some of them will be difficult to persuade if Hong Kong surfaces.'  Certainly there was little Hong Kong nuance in evidence as the latest salvo against 'Red China' worked its way through the system.

 Mr Lott quoted from a report in right-wing magazine Insight that described Hutchison chairman Li Ka-shing as an 'important cog in the economic machinery' of the mainland's Communist Party and military.

 At one point, Mr Lott even described Hutchison as an 'arm' of the People's Liberation Army.

 The letter first surfaced on the front page of the right-wing Washington Times under the headline 'China company grabs power over Panama Canal'.

 More publicity is expected as California Congressman Dana Rohrabacher - a key member of the anti-China lobby - heads to the canal today on a fact-finding mission.

 Late last month, Mr Rohrabacher claimed before a House International Relations Committee hearing that the mainland had already taken control of the canal - a statement that brought stiff reaction from both Hutchison and the Foreign Ministry in Beijing.

 Staff of both Mr Lott and Mr Rohrabacher do little to ease fears that Hong Kong could find its image trampled over.

 'This isn't about Hong Kong per se. It is about China and national security,' one Rohrabacher staffer said.

 'Who knows where it will end up?'  SAR representatives in the Hong Kong Economic and Trade Office have kept publicly clear of the issue but express private fears.

 'It is obviously disturbing and we are monitoring developments closely,' one official said. 'Our concerns are ultimately that Hong Kong companies with substantial ties to the mainland must not be penalised.

  'Hong Kong companies have a good international reputation, and we are confident their key trading partners still understand that.' 



Senator's Panama salvo exposes US election hazard facing SAR