*********************************

Follows is a transcript of remarks to reporters by the Chief Executive, Mr Tung Chee Hwa, after a US Chamber of Commerce lunch in Washington D.C. today (April 7, US time):

Q: (BBC): How important do you think is the breakdown in negotiations between the EU and China on WTO accession?

Mr Tung: Well I was a businessman before, and negotiations may go on for a bit. There are always tactical moves this way or that way. I would imagine for the greater good everybody, there will eventually be an agreement.

Q: (Washington Times): You spent some time on Capital Hill yesterday trying to make the case why PNTR is important for Hong Kong. And I'm sure you gathered that one of the major problems for the United States is that this country is extremely divided about the benefits of free trade. Hong Kong has had a remarkably consistent record in supporting free trade, investment, information, you name it. What has been the secret to Hong Kong's success in maintaining a consensus in Hong Kong for this path? It seems to be a trick that you could stand to teach Trent Lott [Senate Majority Leader] and Dennis Hastert [House of Representatives Speaker].

Mr Tung: Well I'm not sure I can teach anybody. But I will say this: Hong Kong is very successful because, you are right, we consistently believe in the free market. We consistently believe in free trade. You know, America is a great country. There will always be debates about every issue there is, but you know the evidence of the benefit of free trade for the United States of America is so clear. Look at what's happening to America today. Growth is one of the highest on record. Unemployment is the lowest on record. Wealth is improving. And you know free trade is one of the main contributing factors to all that. This is my first point. My second point is that, you know, for instance, trade with China today is about US$21 billion. I understand this creates about 250,000 jobs. Now it has been estimated that trade with China will double within six, eight years or so. So even if American companies don't increase their trade share, and I think they will, let's say it increases to US$42 billion. Just think of the number of jobs that would be created for that. So I think it's good for America. It's a win-win situation. But on the other hand, if PNTR does not go through the Japanese companies and the European companies will take advantage of the whole situation. So I would hope that Congress would do the right thing at the end of the day.

Q: You have met with the Republican leaders out here and I was just wondering if you could just tell us if you had any plans to meet with the Democratic leadership. You are putting your case very well but there are some Democrats sitting on the fence and have you had a chance to meet with them and if not, why not?

Mr Tung: Well I have met, actually through the arrangements the Senate and House have made, Republicans and Democrats, both I have met. And there's an enormous effort going on now in this country to get the PNTR approved. And as I have said that at the end of the day I hope it will be possible. I'm seeing as many people as possible here. It has been a lot of hard work but I hope that at the end of the day the Senate and Congress will do the right thing.

Q: What would you say to the US labour leaders who are opposed to PNTR on the basis of Beijing's human rights and labour rights records? And can you give you answer in English and Cantonese please, m'goi?

Mr Tung: If I am addressing the American labour unions I'm not sure they'd understand Cantonese! (laughter). I would say this, that you know I am not a spokesperson for China, I speak on behalf of Hong Kong, I want to emphasise that. But since you have asked the question I will attempt to answer it. Just now Ambassador [Craig] Johnstone said that the labour standards today in China are far better than they were 22 years ago. So if American labour unions really care about labour standards please support PNTR. That's my number one answer. Number two is about human rights. The human rights that are enjoyed in China today are overwhelmingly better than that 22 years ago. Twenty-two years ago, according to the United Nations, over 300 million people lived under the poverty line. Today the number is way down to 60, 70 million people. To those people who really care about human rights they should support PNTR. That would be my answer to you.

Ends/Saturday, April 8, 2000

NNNN