HONGKONG business leaders yesterday welcomed US President Bill Clinton's renewal of China's Most Favoured Nation (MFN) trade status for another year, but some foresaw trouble in 1994 over the human rights conditions if the issue is not resolved within the next 12 months. The fact that Beijing yesterday reacted to the MFN renewal by protesting the US decision and warning that it could harm Sino-American relations gives credence to the fears of some in the Hongkong business community. Despite the concern, Hongkong businessmen expressed the hope that the two governments would settle their differences in the coming year. ''We have breathing space for another 12 months during which, I believe, we'll see Sino-US relations move closer together,'' said Mr Raymond Ch'ien, acting chairman of the Federation of Hongkong Industry. ''The reality is this: the next 12 months will see China become the biggest buyer of capital equipment in the world,'' he said. In reaction to the US decision, a Chinese Foreign Ministry spokesman, quoted by the official New China News Agency, said: ''This constitutes an open violation of the principles set forth in the three Sino-US joint communiques and the agreement on trade relations between China and the US, and is a serious interference in China's internal affairs. ''The Chinese Government hereby expresses its strong opposition to the US move and lodges a protest with the US Government.'' Mr Francis Lo, executive director of the Hongkong Trade Development Council, said Beijing's reaction was predictable. ''China has already said that she will object to any conditions being attached on the MFN status of US. I believe there are still many channels open for both governments to settle their differences,'' he added. Renewal of MFN for another year gives China-made goods, entering the US market, the lowest possible tariffs. Beijing trade officials told the China Daily they were happy with this year's renewal, but rejected the conditions. ''We welcome his (President Clinton) wise decision,'' the unidentified officials said, but added: ''We hold that China will not accept anyconditional extension.'' Diplomatic analysts said that, despite the protest, China had actually got the best deal possible. Mr Joe Massey, the former US chief trade negotiator on China, said: ''Fortunately, the conditions are not unreasonable. They are restricted to a few areas only and not very broad.'' The Hongkong Government and the TDC will review their lobbying plans on the US-Sino trade disputes soon. Hongkong trade and industry secretary Mr Brian Chau Tak-hay said: ''In the new situation, we have to conduct a review and decide what we are going to do in terms of lobbying strategy.'' Mr Chau pointed out that the MFN for China had always been renewed on an annual basis because of the existing US law governing the issue. There have been uncertainties about each year's renewal for the past four to five years. ''I think Hongkong businessmen and investors in China have more or less got used to these uncertainties. In other words, this factor is already ingrained into the system. The new situation, of course, creates a slightly higher degree of uncertainty.''