US backs Patten on HK contracts

THE United States has given valuable support to Hong Kong's Governor, Chris Patten, calling on China to respect contracts in the colony after it takes control in 1997, writes Raymond Whitaker.

Peking significantly stepped up pressure against Mr Patten's plans for more democracy in Hong Kong when it warned three weeks ago that any government contracts it had not approved would be invalid after the handover. Its threat, closely followed by suggestions that China might not consider itself bound by the 1984 Sino-British Joint Declaration on the future of Hong Kong, severely damaged business confidence in the colony and sent the volatile stock market plunging.

Yesterday, however, the outgoing US Commerce Secretary, Barbara Franklin, said in Hong Kong that Washington would act to protect American firms if their interests and contracts were under threat after 1997. 'Let me state clearly, the leaders of China need to realise that contracts must be respected. Respect for contracts is vital to a modern economy and to a modern China,' she told the American Chamber of Commerce. 'The United States will do all it can to protect the interests of American businesses and the continuity of American contracts here in Hong Kong. There can be no wavering on this point.'

Ms Franklin, the most senior American official to visit China for several months, was careful to follow the line of President-elect Bill Clinton that the transition to Chinese rule of Hong Kong was a matter for London and Peking. But after talks with Mr Patten on his constitutional proposals, she voiced cautious support, saying the US 'supports democratic values around the world, including here in Hong Kong'.

Some officials believe there has been a modest slackening in China's campaign against Britain and Mr Patten recently, perhaps in deference to Ms Franklin. Peking's press outlets have continued to abuse selected targets, but the 30 November threat to contracts has not been repeated by official spokesmen. China's Foreign Minister, Qian Qichen, did not refer to it during a rare meeting with the foreign press last week.