CHINA MFN VOTE MARGIN HAS HONG KONG WORRIED

CHINA MFN VOTE MARGIN HAS HONG KONG WORRIED

While relieved at the Senate's failure to attach strings to China's trading status with the United States, local business and government officials said Thursday they are already gearing up for next year's replay.

The 60-38 vote was half a dozen short of the two-thirds needed to override President Bush's veto of a bill that would have required China to meet several conditions to maintain its most-favored-nation eligibility.MFN status ensures the lowest available tariffs and is granted to most American trading partners. China's qualification is reviewed each year on human rights and other grounds.

In 1991, the margin against adding conditions was higher, and it is the erosion of support for Mr. Bush's position that worries people here.

"The vote is positive for U.S.-China relations . . . but we view it as another reprieve, not as a final victory," said Ian Christie, director of the Hong Kong General Chamber of Commerce.

Ian Perkin, the chamber's chief economist, said there "were 44 Republican Senators solid (against conditions) a year ago; now they aren't so solid."

He believes the key difference between the two votes is the report on ''possible sales, or alleged sales, of Chinese arms to various people around the world."

A chamber delegation will visit Washington in May to put Hong Kong's views on the necessity of maintaining MFN status. The colony is China's principal trade gateway and, most of its own manufacturing is now done in China.

Before the U.S. trip, the chamber plans a visit to Beijing to talk to Chinese officials, Mr. Perkin said.

Malcolm Matthews of the Federation of Hong Kong Industries believes local firms should do more on their own than merely relying on government lobbying.

He argues for a more resolute buy-American philosophy, in effect making American companies constituents for the colony.

"While we should certainly state our case and ask Congress for more consideration of Hong Kong's position if it gets caught in the middle, it might be more practical if we had American suppliers working for us in America arguing our case," he said.

T.H. Chau, secretary for trade and industry, agreed that "unfortunately, this is not the end of the matter. We cannot afford to be complacent."

In Beijing, Wu Jianmin of the ministry of foreign economic relations and trade said the government "has taken note of" the vote.

China rejects any conditionality on its MFN status. Losing it would mean duties of up to 100 percent on a wide range of exports to the United States, which Beijing says would be met by similar action on its part.