British concessions on Hong Kong worry business

Britain's announcement about the future of Hong Kong is widely seen as definitive and forecasting the end of an era. On Friday, Britain made public a key concession to China about the colony: It will no longer try to resist or modify a mainland Chinese administrative takeover when Britain's 99-year lease on Hong Kong's New Territories runs out in 1997.

The news, which has caused dismay among many expatriate Britons in the dependency, was announced by the British foreign secretary, Sir Geoffrey Howe, after talks in Peking and Hong Kong.

Britain and China have held 12 rounds of talks about Hong Kong's future since last July. The next round will begin at the end of this month.

During months of secret talks between Britain and China, British negotiators explored the idea of a shared administration. But Peking resisted the idea, and London dropped it.

This means that in 13 years, Hong Kong will have a Chinese administration acceptable to Peking instead of a British governor.

Speaking in Hong Kong, Sir Geoffrey said that during the remainder of the negotiations, Britain will continue to press for safeguards to protect British business interests in the colony as well as the interests of the local population. But it is thought that China will try to avoid detailed commitments except on terms it lays down itself.

Peking has already said it is willing to let Hong Kong become a ''special administrative region'' run by local people, with a freely convertible Hong Kong dollar, freedom of speech, and authority to issue its own travel documents.

Britain, however, is doubtful about such promises. Local Hong Kong businessmen fear that the territory will lose its reputation for commercial acumen and sink into a morass of mainland politics and administration, much as Shanghai has already done.

The so-called New Territories constitute over 90 percent of Hong Kong's land space. The remainder will continue technically under British sovereignty after 1997, since it is not leased. But it is recognized in London and China that the colony without the New Territories would not be a viable entity.

Hong Kong Island was ceded to Britain in perpetuity in 1841, and confirmed by the treaty of Nanking the next year. The tiny strip of land known as Kowloon gained similar status 19 years later.

Sir Geoffrey indicated that British negotiators will set out to extract detailed written commitments from China about the future of Hong Kong after 1997 . Local Chinese are demanding that Britain consult them at every step.

In his talks in Peking, Sir Geoffrey was assured by China's elder statesman, Deng Xiaoping, that the People's Republic would not erode Hong Kong as a business, banking, and trading center.

But Hong Kong business interests are skeptical about Mr. Deng's promise, and want it in writing as part of a final agreement.

In London, there are hopes that this will happen, but not a great deal of discernible optimism.

China specialists say Peking is mainly interested in ending what it sees as a humiliating, ''unequal'' treaty.

They seriously doubt whether future Chinese governments will be able to resist the temptation to influence Hong Kong, communist style.

This would wipe out Hong Kong's attractiveness for business interests seeking maximum scope for capitalist activities.

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