Hong Kong -- A 1997 deadline approaches

Hong Kong is an adopted child with an uncertain future.

Its geography, population, and its past are inexorably linked to mainland China. Its present economic strength flows from the rule and capitalist laissez faire of Britain.

Although this curious mix of East and West has benefited both China and Britain for 140 years, Hong Kong agonizes about its future. The thriving British colony faces a sticky question: Will China or Britain become its motherland?

The meeting later this week between Chinese leader Deng Xiaoping and British Prime Minister Margaret Thatcher in China has already been greeted with a flurry of speculation over the sovereignty question. Hong Kong is not the central concern of the Thatcher visit, and the most that is likely to happen is that Britain and China will agree to institute formal consultations over Hong Kong, perhaps on the basis of some bland principles.

But the colony, the world's third most important financial center, is undergoing the psychological and political equivalent of an earthquake tremor. In 1997 most of its territory legally reverts to China - the end of a 99-year British lease.

Hong Kong continues to generate more global trade than China itself. The economy continues to grow at a rate well above the current worldwide average. But the stock market gyrates, the Hong Kong dollar exchange rate sinks, and recently a bank run threatened briefly to get out of hand.

The ultimate depressant consists of a simple calculation. If Hong Kong is to revert to Chinese sovereignty and jusrisdiction, there will be no waiting for 1997 to arrive. Once reversion was agreed or announced, business confidence in Hong Kong would plummet so rapidly that it is likely that the handover would take place well before the agreed date.

This extreme anxiety represents a volatile switch from optimism to pessimism. Until a few months ago the dominant, sometimes naive, conventional wisdom was that a way would be found to keep Hong Kong both capitalist and free.

There were many good reasons for optimism, most of which are still valid. Two-way Hong Kong-China trade has greatly increased. Chinese banks, trading companies, and other concerns that are communist-owned or influenced have been taking ever greater advantage of Hong Kong's free enterprise environment. Communist-backed property companies participated in the property boom, even to the point of paying inflated prices for land in tte New Territories, which, theoretically, would belong to China anyway on July 1, 1997.

Hong Kong has proved useful as China has tried to concentrate upon the ''four modernizations'' and on sustained economic growth. Hong Kong firms have helped build and staff new hotels for China's booming tourist trade as well as being the source, or jumping-off point, for 80 percent of China's tourists. Hong Kong investors have been the first to take advantage of China's new stress on joint ventures.

The colony also is a place where China can sell ever greater quantities of its consumer goods, water, pigs, vegetables, and so on. In the last two or three years China's direct earnings have tripled to between $6 billion and $7 billion, roughly 40 percent of China's foreign-exchange income.

There have been some disadvantages for China, such as the ''insidious'' influence of Hong Kong television and Hong Kong-derived smuggling of items as diverse as Chinese Bibles and pornographic magazines. But overall, the colony has assumed the very substantial benefits it provided China were so great that the Chinese would be bound to find some way of sustaining the status quo.

Now, amid current Hong Kong unease, there seem to be more reasons for doubt than hope.

First and last, China and Britain have, in their separate ways, undermined confidence in the entity that profits both of them. Regarding China, Hong Kong's optimism that economic rationality would prevail has given way to pessimism that China's political imperatives might dictate another solution. Regarding Britain, pessimism has grown as it has been realized that ''Little England'' might not want to stay on, although the Falklands episode briefly revived hopes that Great Britain might revive.

Doubts about Britain started gathering momentum when the new Nationality Bill last year reduced Hong Kong's 2.6 million British subjects to the rank of second-class citizens with no claim to British residence. Initially this was seen as unsettling. More recently, it has taken on the appearance here of an early British move toward divesting itself of its Hong Kong responsibilities.

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