PROFILE : Baroness Is Driving Force Behind Hong Kong : Commerce: Lydia Dunn is a tireless trade promoter for the British colony. She contends that it will be business as usual when China takes over.

When Cathay Pacific Airways recently celebrated its inaugural flight from Hong Kong to Los Angeles, Baroness Lydia Dunn was the top attraction.

Once again, Dunn was on the campaign trail in her role as chairwoman of the Hong Kong Trade Development Council, promoting it at a time when both residents and outsiders fret over its future. Amid worldwide concern over what will happen once the British colony reverts to Chinese rule in 1997, Dunn is unfazed--even in the aftermath of the Tian An Men massacre in China in June last year.

“Tian An Men changes nothing as far as China and Hong Kong are concerned,” she said, arguing that its future is secured by the treaty between Britain and China that provides guarantees Hong Kong’s capitalist system will remain unchanged for 50 years while its free port status and free trade policy are maintained.

“Hong Kong’s future is in the Sino-British Joint Declaration. The motivation of the treaty is China needs Hong Kong,” Dunn said. She noted that Hong Kong is an important outlet for Chinese goods. Hong Kong last year re-exported 96% of the $25.2 billion in goods that it imported from China. Hong Kong is also the largest investor in China, accounting for two-thirds of the $33.7 billion worth of direct foreign investment between the years 1979 and 1989.

The 50-year-old Dunn may not be well known on this side of the Pacific, but she has a starring role in promoting trade with Hong Kong. Dubbed the “Margaret Thatcher of Hong Kong” because she is considered the most powerful woman in the British colony, Dunn influences both trade and politics.

In addition to her role at the Hong Kong trade council, Dunn is also the top adviser from the private sector to the Hong Kong governor in her role as the senior member of the Hong Kong Executive Council. Recently, Queen Elizabeth II of England awarded her a life peerage--hence the Baroness title--making her the first Chinese and woman to be given a voice in the British Parliament to speak on behalf of the colony.

“People hear more about her than Sir David Wilson (the Hong Kong governor),” noted Hong Kong-born Alam Kam, vice president and deputy manager of the Los Angeles branch of Standard Chartered Bank. “She’s very hard working and has contributed tremendously not only to trade for Hong Kong. She’s a good ambassador.”

Since she took over the helm of the Hong Kong trade council in 1983, Hong Kong-U.S. trade has grown from $9.1 billion to $24.4 billion last year, making the United States the No. 1 trading partner of Hong Kong.

Dunn argued that Hong Kong trade opportunities for American firms are large. California’s exports to Hong Kong last year totalled $1.3 billion, an increase of 12% over the previous year, state government figures show.

“People tend to think about Hong Kong as an exporting economy and forget that we import every bit of raw material that goes into our exports,” Dunn pointed out. “We have the 11th largest trading economy in the world. We’re a very big market in our own right.”

The Hong Kong trade council, which maintains an office in Los Angeles, considers the West Coast region “of foremost importance to the development of U.S.-Hong Kong trade,” said a council spokesman. In the last two years, the trade council has drawn up more trade promotional activities in Los Angeles.

The importance of Los Angeles was illustrated in January this year when Hong Kong-based Cathay Pacific Airways, of which Dunn is a director, shifted its U.S. regional headquarters here from San Francisco. “We see a need to have our regional office in what we think is the largest potential market for us,” said Peter J. Buecking, a Cathay Pacific vice president.

The airline has stopped its daily San Francisco-Hong Kong flights, introduced in 1986, and substituted them with four times a week nonstop Hong Kong-Los Angeles flights, beginning July 1 this year. “This is in recognition of Los Angeles as a market unto itself and as a gateway to the United States and Latin America,” Buecking said.

In October, the Hong Kong trade council will hold its first trade and cultural program in Los Angeles. The five-day event at the Century City Shopping Center will include fashion shows, product exhibits and cultural programs.

The Hong Kong trade council is also helping small and medium-sized Los Angeles companies market their products and services in Hong Kong with the help of a computer network that matches local firms with Hong Kong buyers. The program, launched last year by the council and the city of Los Angeles, aims to trim the Los Angeles area’s $1-billion trade gap with Hong Kong.

In addition, the Hong Kong trade council, Los Angeles government officials and the business community here are organizing a “Los Angeles Week” in Hong Kong next year. “Los Angeles is not as well known as San Francisco in Hong Kong,” explained Dunson Cheng, president of Los Angeles-based Cathay Bank and one of the organizers. “The event will help us promote tourism, trade and investment.”

Dunn has been able to bring private sector experience to good use in her role as chairman of the trade council. She sits on the board of directors of John Swire & Sons (H.K), one of the largest trading companies in Hong Kong. Dunn runs the trading division of a subsidiary, Swire Pacific Ltd., which has import-export and retailing businesses in Hong Kong and six other Asian countries.

She was also chief architect of the proposal to build the $320-million Hong Kong Convention & Exhibition Center, which opened in 1988. A number of major international trade fairs have been held there.

Meanwhile, Dunn, who first entered politics in 1976 when she was appointed a member of the Hong Kong Legislative Council, continues to be one of the most prominent spokespersons for Hong Kong as it goes through its transition period. Last year, she was among those who helped to obtain the right to settle in Britain for at least some of the colony’s 3.25 million British passport holders. The rest of the 5.8-million population were not born in Hong Kong.

“It was difficult to get all we wanted, but we managed to get an agreement for 50,000 heads of family,” she said. The task brought Dunn to tears when she pleaded their case in Hong Kong before a group from Britain’s Parliament in April last year.

But lately, there have been murmurs back home that Dunn has become too close to the British and may not be an effective spokesperson for the interests of the Hong Kong people. She married a British man, Michael Thomas, the former attorney general of Hong Kong in 1988, and has a second home in London. “I’m a Hong Konger,” she replied. “I’ll do my best for Hong Kong.”