AS China rages next door, a jittery Hong Kong is getting a clear idea of how far its future ruler will go to block more democracy in the colony.
In the battle of wills over Hong Kong's future, Beijing seems ready to pay a high international and economic price - as well as create divisions in the colony - in order to stop Britain's upstart governor, Chris Patten.
Yet as the colony continues its daily business and bustle, many think a compromise with Britain's last caretaker can yet be found and note that large-scale capital flight has yet to begin.
"China is turning the screws here internationally and economically," says Byron Weng, a political scientist at Chinese University of Hong Kong. "Even with the kind of image problems this creates, they are ready to bear the loss."
Defying China, Hong Kong's Legislative Council last week narrowly cleared the way to start building its planned $10.6 billion airport. Beijing fears it will be saddled with huge debts when the colony reverts to China in 1997 and has insisted that its approval must come first.
After weeks of threats, Beijing declared that all contracts for the airport and other projects signed by the Hong Kong government but not cleared by China would be invalid when Britain ends its rule. In response, the stock market plummeted.
Britain pronounced Beijing's action a violation of the Sino-British Joint Declaration and the Basic Law which govern the colony during the transition period and insure economic and political freedom in Hong Kong for 50 years after China takes over.
Mr. Patten also reaffirmed Britain's commitment to his political reform plan, which was unveiled in October and would marginally increase democracy in the runup to 1995 legislative elections. The governor, formerly head of Britain's Conservative Party, proposes to lower the voting age from 21 to 18 and restructure Hong Kong's constituencies and electorate.
China is targeting Patten with a unanimity and vehemence not usually seen among Beijing's fractious Communists, analysts say. Patten's smooth, populist style, more than his reform plan, appears to have embittered Beijing.
Beijing sees Patten as the final insult after decades of British imperial control that began with the Opium Wars in the 19th century.
In addition to scaring Hong Kong, China is banking on cowing Britain and its politically shaky Prime Minister John Major, Patten's close ally and friend. Last week, Britain's former China policy adviser, Sir Percy Cradock, warned that Beijing would destroy Hong Kong's economy rather than accept Patten's plan.
"Chinese people are known for their hospitality. But if someone comes into their houses to rob, they will get out their guns," says a senior Beijing journalist close to high-ranking officials.
"The message from Beijing is that the issue is not democracy. The issue is this man [Patten], and they will get him at all costs," says a political analyst in Hong Kong who requested anonymity.
Although Patten's reform plan has struck a responsive chord in Hong Kong, even the governor's backers suggest he may have underestimated China's response.
To China's elderly dictators, it seems Britain, in league with the United States and other Western countries, is using Hong Kong to thwart Chinese ascendancy in the post-cold-war period and even topple Beijing's government.
"For China, it is an issue of our sovereignty," says a Beijing dissident who was jailed after the Army massacre of protesters in Tiananmen Square in 1989. "China will never back down."
Patten's heroics also have alienated Hong Kong's moneyed elite and dramatically redrawn the political lines in the colony. After decades of getting rich through chummy relations with the British, Hong Kong's tycoons have shifted allegiance to Beijing.
They fear that Beijing is ready to sacrifice the colony, currently the economic anchor for China's booming southern provinces, as fast-growing inland areas emerge to rival Hong Kong.
Aligned with Patten are a newly emergent core of political liberals, a group of Hong Kong youth who fearfully remember the crackdown on Beijing students in 1989, and a quiet, but significant percentage of the population who fled the mainland for the freewheeling ways of Hong Kong.
Political observers say Patten could narrowly carry the Hong Kong legislature when the reform proposals come up for a vote early next year. But Patten could be forced into a compromise to stem Hong Kong's economic decline, analysts say.