PACIFIC PERSPECTIVE : No Policy Is the Wrong Policy : The United States has huge stakes in Hong Kong and must not be stuck in a reactive role as 1997 approaches.

Like the Cheshire cat from “Alice in Wonderland,” the British are fast disappearing from Hong Kong. Even now, six years before Hong Kong’s handover to China in 1997, some people see only a lingering grin.

The British are satisfied. Their surrender of the empire’s last major colony to China is approaching with scarcely a raised eyebrow from the rest of the world. Success in the handing over of 6 million free people against their will, to a communist tyranny, while maintaining the approval of the Free World, shows British diplomacy at its most skillful. Even Tian An Men Square, that bloody showcase of unreformed communism, only slowed the process; everything is now back on schedule.

But what about America’s stand on Hong Kong?

American and British interests, although they coincide in the Persian Gulf and in most parts of the world, diverge sharply in East Asia. This is because the British are on the way out, while the Americans are staying. As the region’s policeman and guarantor of security from Japan to Australia, America has long-term commitments, while the British are mainly interested in a safe retreat.

U.S. economic interests in the region are incomparably greater than Britain’s. Even in British Hong Kong, America’s economic stake far exceeds Britain’s. There are more than 900 American companies, employing a quarter of a million people, 10% of the work force. Americans own 158 factories and have invested $1.4 billion in Hong Kong manufacturing, accounting for a third of all foreign investment.

Hong Kong is the 14th largest U.S. export market, a major buyer of American high technology and among the top three markets for oranges, poultry and cigarettes. The American community, 20,000 strong, far outnumbers Britons.

And of course Hong Kong is the gateway to China for American trade--and American ideas.

Hong Kong’s stability is rightly an American concern. Yet the United States has been a bystander in Hong Kong’s transition, with little to say since 1984, when it was the first to endorse the “one country, two systems” premise of the Sino-British joint declaration on Hong Kong’s future.

Deference to China and Britain became the rule--to the point where U.S. consular staff were ordered to always sound optimistic on Hong Kong’s future. This stance suited the interests of American businessmen but did nothing to advance America’s nobler democratic ideals. U.S. policy on Hong Kong was not to have one.

Tian An Men Square made American silence morally untenable. Hong Kong became a central factor in Sino-U.S. relations. When China’s most-favored-nation status came up for renewal last June, U.S. legislators had to weigh their desire to punish China for its savagery against the economic interests of Hong Kong and of Americans there.

To secure the recent U.N. Security Council ultimatum to Iraq, the United States felt compelled to reward China with Foreign Minister Qian Qichen’s Washington visit--effectively ending its post-Tian An Men sanction against high-level contacts and arguably giving China a tactical edge.

Qian wasted no time. He reasserted that human rights were an internal affair. And U.S. Ambassador to China James Lilley, like the monkey dancing to the organ-grinder, played into his hands. Lilley called students demonstrating in Seattle against China’s repression of Tibet “cowards” and told them they should go back to China.

Meanwhile, in Hong Kong, there is much that cries out for American comment--comment springing from the framework of a real policy. Key provisions in the 1984 Sino-British joint declaration have been perverted or ignored in the Basic Law, which will govern Hong Kong come 1997.

In effect, Britain has caved in whenever China disapproved, despite the misgivings of Hong Kong’s more perceptive legislators. The longstanding promise of democratization has faded into a legislature with only one-third of its members to be directly elected in 1997 and only one-half in 2007. People under age 21 remain disfranchised. A fledgling bill of rights has been so diluted that it’s meaningless.

Only China’s National Party Congress can amend and interpret the Basic Law. The list of controls goes on, giving the lie to Deng Xiaoping’s “One country, two systems” formula.

Britain can’t wait to extricate itself. Lord Caithness, the minister responsible for Hong Kong, said as much when he pronounced that it is up to Hong Kong to revoke the statutory death penalty.

China can’t wait to step in. Its New China News Agency--fractionally a news bureau but mostly a policy enforcement “embassy”--muscles in on Hong Kong affairs regularly. Orderly Hong Kong demonstrations for democracy are considered subversive. Subversion can earn the death sentence in China; Lord Caithness’ buck-passing carries treacherous implications. Hong Kong is not used to voting, thanks to 150 years of colonial rule, but, by the same token, it isn’t used to having its protesters shot for holding a meeting.

Developments since 1984, and particularly since June 4, 1989, should have made it clear that until the United States sorts out its own complex stakes in Hong Kong and China and then forges its own Hong Kong policy, America will be stuck in a shamefully reactive role.

There are indications that this truth has hit home. “Hong Kong has become a factor in U.S. foreign policy considerations,” said U.S. Consul General Richard L. Williams in a recent speech in New York. Williams pinpointed the Sino-British joint declaration and the maintenance of Hong Kong’s stability and prosperity as the basis of American policy. He cited new immigration provisions, encouragement of American business in Hong Kong, support for Hong Kong’s participation in international organizations and proposed bilateral legal agreements as key policy components. Most significantly, he said Americans supported the democratization of Hong Kong. These are all elements of a sound policy, long overdue. Now there must be a fuller elaboration much more widely and forcefully expressed.