Partial MFN plan 'unworkable'

PROPOSALS for a Most Favoured Nation (MFN) status compromise involving selective sanctions on Beijing were an unworkable ''delusion'', Chief Secretary Anson Chan Fang On-sang said last night.

In the first public engagement of her week-long US visit, Mrs Chan struck a tough note on partial MFN revocation, which is being touted in Washington.

''I have heard it suggested that some middle road is feasible between renewal and non-renewal of MFN, some form of selective or targeted non-renewal,'' Mrs Chan told the prestigious National Press Club.

''Let me say bluntly that this is a delusion. Quite apart from the practical difficulties in attempting to distinguish between goods produced by state and non-state enterprises, there are considerable risks.'' Hong Kong, which stands to lose 75,000 jobs if MFN is totally revoked, would still be seriously damaged under some partial solution, she warned.

''It would create uncertainty for Hong Kong because it is simply not possible to insulate Hong Kong from the effects of sanctions against China.

''This uncertainty would damage confidence at the very time we need it most - just three years before the change of sovereignty. The task of preparing for the transition has not been easy and will not be easy.

''We have had our differences in the past with the Chinese and no doubt there will be differences in the future. So far we have managed largely because we continue to enjoy healthy growth. This in turn hinges on robust growth in China.''