Panelists speaking at the Institute of Politics (IOP) last night said continuation of most favored nation trading status for China would be the best way to support political reforms in Hong Kong and China.

The discussion, co-sponsored by the IOP and the Harvard Hong Kong Club, centered on what the future holds for the British colony of Hong Kong. The People's Republic of China will assume administrative control of the colony when Britain's one hundred year lease on the territory expires in 1997.

Alex Fong, director of the Hong Kong Trade Office in New York City, said the people of Hong Kong have confidence in their booming and prosperous economy.

"How many governments can brag of lowering taxes, raising social spending and reporting a $43 billion (US) surplus, all in the same year?" said Fong.

China and Hong Kong depend on each other for one-third of their trade, so talk of American withdrawal of most favored nation status, not the impending Chinese take-over, is what jars the nerves of investors in Hong Kong, said Fong.

"The greatest threat to Hong Kong is not China, but American foreign policy," said Dwight H. Perkins, Burbank professor of political economy.

Perkins said American trade sanctions would also jeopardize the drive towards greater political liberalization in China.

American trade sanctions would hurt the Chinese economy, said Perkins, which "would be the evidence the conservatives in Beijing would use to show the West is against the Chinese, and turn inward."

Self-Censorship

Joseph Chen, a visiting scholar from the Chinese University of Hong Kong, said limitations on the freedom of the press loom in spite of economic liberalization.

"Hong Kong was accused of being a subversive base after the Tiananmen crackdown in 1989," said Chen. "The fear now is that reporters will practice self-censorship to prevent being blacklisted by the Chinese government."

Chen said police have detained reporters for years for criticizing the Chinese government without credible evidence.

One reporter for an independent newspaper in Hong Kong was sentenced to 12 years for "stealing state secrets." He had leaked financial documents pertaining to possible interest rate hikes by the Bank of China.

"Speculators in financial markets do this all the time, but you don't see them being jailed for 12 years," said Chen.

Anthropologist James L. Watson, Fairbank professor of Chinese society, said it was not China that would absorb Hong Kong, but Hong Kong that would absorb China.

"Hong Kong is the cultural center of southern China," said Watson. "It is transforming Chinese society. It is this cultural change that frightens the cadres in Beijing most."