They're Off! Jockey Club Races to 1997 Finish Line

'The dances will continue to be danced, and the horses will continue to race" after Hong Kong reverts to China, Deng Xiaoping once said.

The Chinese patriarch always did have a shrewd insight into the Hong Kong psyche. Horse racing is so integral to Hong Kong that life without it would be hard to imagine.

Every Wednesday evening it seems as though the territory comes to a halt. As night falls, thousands of fans clog the crowded roads leading to the huge stadium. A roar erupts from the stands as the horses leave the starting gates, and images of thundering horseflesh flicker across a giant television screen in the infield.

The privileged members of the Hong Kong Jockey Club, watch from their private boxes. Away from the field, taxi drivers tune into the races on their radios; other people gather around their TVs.

The British had no sooner taken up residence in Hong Kong in the 19th century than they laid out a makeshift track in Happy Valley, virtually the only stretch of flat land on Hong Kong island. That was in 1846. By 1871, horse racing had become the only legal form of gambling, and in 1884 the jockey club was formed.

From the beginning, the club was the focal point of European colonial social life. It has been said that Hong Kong is run by the Jockey Club, the Hong Kong and Shanghai Banking Corp., and the British-appointed governor - in that order.

Certainly, there was no better sign that one had "arrived" than to be named one of the 12 club stewards. Chinese were not allowed to join the club until 1926.

Today, of course, the 12 are predominantly Chinese. In 1994, Alasdair Morrison, the taipan, or big boss, of Jardine Matheson & Co., Hong Kong's oldest trading company, failed to win appointment. Instead, the post went to one of the territory's rising "red princes," Larry Yung, chief of CITIC Pacific, the investment arm of the Chinese government.

But nothing was more emblematic of the changes taking place in Hong Kong than the appointment of Lawrence Wong as the club's first Chinese chief steward. He replaced Maj. Gen. Guy Watkins, the last in a long line of retired British Army generals to hold the post.

Mr. Wong took on his new duties in April, moving from Taiwan, where he had been the chief executive officer of Ford Lio Ho Motor Company, a joint venture with the American carmaker. He cheerfully acknowledged that he knew nothing about equine bloodlines. But he is familiar with the bottom line, which in his position might be more useful.

That is because the jockey club is more than just a sporting establishment and social club. It is a major industry, one of the largest in Hong Kong, with an annual cash flow approaching $10 billion. The profits beyond expenses are plowed into charitable works, such as schools and clinics, even the building of Hong Kong's third university.

In his first meeting with the racing press, the former Taiwan "businessman of the year" studded his conversation with terms such as "economies of scale," "product management," and the "demographics" of racing. Horse racing, he repeatedly said, is "our product." Horse-racing aficionados, presumably, are the "customers."

His training as an engineer may be tapped, too. The club is moving into electronic "tele-betting" in a big way. Its races now simulcast on television screens in Canada, Australia, and the United States - all places with large populations of Hong Kong immigrants unwilling to forgo their favorite pastime. The club is said to be one of the world's leading companies in developing computer-software security, complete with secure PIN codes.

The club's position after 1997 seems sound, even though racing's legality in China proper is ambiguous. The Communists banned all forms of gambling as a throwback to "bourgeois imperialism" after they took over China in 1949. Nevertheless, race tracks have sprung up in some of China's larger cities. The races in nearby Guangzhou are run by the municipal council.

The club voted without any fuss to drop "royal" from its title, effective this July. It remains to be seen whether the Queen Elizabeth II Cup race will be renamed the "Deng Derby."

And what does Lawrence Wong think about July 1, 1997, the day Hong Kong reverts to China? For him, it's just another day at the races.