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The Chief Executive, Mr Tung Chee Hwa, believes American business will be in a 'win-win' position if the US Congress votes to grant Permanent Normal Trading Relations (PNTR) to China.

Speaking at a lunch in New York attended by more than 400 business leaders, academics and think-tank members, Mr Tung said international businesses based in Hong Kong stood to benefit greatly once China entered the WTO.

"No doubt US businesses will make good use of their presence in Hong Kong to leverage the significant opportunities created by China's entry to the WTO," Mr Tung said.

"It has been estimated that China's trade as a result of accession will double within the next six years. So, even if the US market share remains unchanged, US exports could grow from US$21 billion in 1999 to US$42 billion by 2006.

"But US market share is likely to increase given the strength of American companies and the substantial openings in the Mainland market in many US priority areas.

"There will be big tariff reductions for many goods and significant liberalization in the services sector," he said.

"Areas covered will include agriculture, high technology, chemicals, wine, wood and paper, autos, banking, insurance, telecommunications, distribution and trading rights, audio-visual, professional services and travel and tourism."

Mr Tung said he was surprised that there was so much debate in the US on the issue of granting PNTR to China, part of the Sino-US trade deal on China's accession to the WTO.

"The US trade agreement with the Mainland is a win-win for US businesses. China will be opening up its markets quite dramatically, while the US need not make any concessions," he said.

"China is set to become a member of the WTO. The issue is whether US business will be able to participate in the Mainland's substantial market opportunities.

"At the end of the day, I am confident that Congress will make the right decision in the interests of the US - in other words, a positive vote for PNTR."

Mr Tung said China's accession was about more than business opportunities.

"It is also about strengthening economic stability in the region. It is about ensuring that differences on trade issues are resolved sensibly," he said.

"It is about developing the global economy on responsible, rules-based principles. It is about maintaining the steady momentum of growth for the betterment of everyone in the world."

Mr Tung told his audience that the US and Hong Kong had always had a close and special relationship.

He pointed out there were more than 1,100 US companies in Hong Kong, of which about 500 had established a regional headquarters or office in Hong Kong.

More than 50,000 American citizens live in Hong Kong, while tens of thousands of Hong Kong people had emigrated to America and thousands of Hong Kong youngsters were studying in American schools and universities.

"These very strong people-to-people bonds are a great asset for both of us. And I hope we can use these existing bonds of family and friends, as well as business, to take our relationship to new heights in the 21st Century," he said.

During his one-day visit to New York, Mr Tung also attended a function hosted by the Economic Club of New York and a reception for Chinese community and business leaders.

Mr Tung flies to the US capital Washington DC later tonight (Thursday, HK time) for a full day of meetings with a wide range of key political leaders. On Friday, Mr Tung will hold talks with US President Bill Clinton as well as US Secretary of State Madeleine Albright.

The Chief Executive will also deliver a keynote address to the influential US Chamber of Commerce.

End/Thursday, April 6, 2000

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