Hong Kong's return to China on July 1, 1997, went surprisingly smoothly. In the ensuing months, policy analysts are trying to assess how the territory will fare in the longer run under Chinese rule. The answer is important to U.S. interests because of the enormous U.S. economic presence in Hong Kong; because any adverse developments in Hong Kong are likely to affect U.S.-China relations; and because China's promise to give Hong Kong a high degree of autonomy under the "one-China, two-systems" policy has major implications for Taiwan. But given the political situation, the American ability to affect the course of events in Hong Kong seems marginal unless the U.S. decides to confront Beijing more directly. Developments in U.S.-China relations in recent years suggest Washington might be hesitant to do so.

This report covers the importance of the democratization of Hong Kong to U.S. foreign policy as well as to Hong Kong itself. It specifically looks at two recent election changes which indicate the Hong Kong government's willingness to press for democratic reforms and also give more power to current government officials over incumbent officials.

As a result of an initiative by Australia in 1989, the United States joined with eleven other Asia/Pacific nations in creating APEC, the Asia Pacific Economic Cooperation organization. This report discusses the annual Ministerial Meeting of APEC in Seattle, held from November 17 - 19, 1993.