lay a role in the Hong Kong settlement. But the U.S. clearly indicated its interest in a peaceful and satisfactory resolution of the issue in such a way as (1) to preserve Hong Kong's u n ique status as a financial and trading center (Hong Kong is the tenth largest trading partner of the U.S.) and (2) to preserve the way of life of the people of Hong Kong. The U.S. also hinted that the manner in which Hong Kong's future would be handled co u ld greatly influence the future prospects for reunification with Taiwan. The U.S. further indicated that it would support Hong Kong's separate participation in the GATT (General figreement on Tariff and Trade) and other multilateral organizations. The off i cial U.S. position on the Hong Kong Agreement was given on September 26, 1984, in a State Department press conference: The U.S. Government welcomes the successful conclusion of two years of negotiations between the United Kingdom and the People's Republic of China over the future of Hong Kong. The United States has a strong interest,in the continued stability and prosperity of Hong Kong and believes the agreement will provide a solid foundation for Hong Kong's enduring future progress. In this regard, we h a ve noted statements by both sides indicating that Hong Kong's way of life will be guaranteed for 50 years from 1997 and that systems existing in Hong Kong will continue in the special administrative region. We expect the American business communities, bot h in the United States and Hong Kong, will see in this agreement good reason for sustained confidence in the future of Hong Kong as an attractive and thriving commercial center. The United States will provide any assistance it can, in close cooperation wit h the United Kingdom and the People's Republic of China, to maintain Hong Kong's a iate participation in international ,2ppropr bodies.' Since that statement many high-ranking U.S. officials have visited Hong Kong and expressed their confidence in'Hong Kon g's future.1 1. For an excellent discussion of the U.S. position see Hungdah Chiu, "The Hong Kong Agreement and American Foreign Policy," Issues and Studies, June 1986, pp. 76-91. 12. "U.K. and China Reach Agreement on Hong Kong," Dwartment of State Bulleti n, November 1984, p. 56.
10By examining the Hong Kong Agreement and the various reactions to it, several observations can be made regarding the impact of the Hong Kong settlement on the U.S.-PRC-ROC triangular relationship, particularly as it relates t o the reunification issue. First, the agreement was one of practical necessity for London, for there was no way Great Britain could have extended its lease on the New Territories. The very survival of Hong Kong depended on PRC acquiescence. By contrast, t h ere is no practical necessity for Taiwan to reunify with the mainland at any time in the foreseeable future. As long as Taiwan has an adequate deterrence and maintains its will to survive as an independent entity, the PRC cannot force Taiwan into negotiat i ons. Nor, arguably, can the United States. Taipei enjoys a privileged position in which it can either accept or reject Beijing's formulas for reunification. Questions of ideology aside, the ROC can evaluate PRC offers from the point of view of the attract i veness of the proposals. Thus far, Taipei has not seen much from Beijing that the ROC does not already have. Second, it appears as if the PRC wants Hong Kong to continue pretty much the way it is now. This is because of Hong Kong's great contribution to C h ina's modernization in terms of foreign exchange earnings, the introduction of technology and investments, and managerial skills. Also, a successful Hong Kong settlement would add enormously to the international prestige of Beijing and demonstrate that th e PRC indeed may have peaceful, noninterventionist intentions toward Taiwan. 'Although the PRC probably wants Hong Kong to remain prosperous because China benefits directly thereby, that incentive is not obvious in the case of Taiwan. Taiwan does not earn f oreign exchange for.the PRC, nor is it a source of 