A NEW party comprising prominent pro-China and rural figures will be set up this year with the aim of preserving Hongkong's stability. The party will evolve from the Federation for the Stability of Hongkong, whose leadership has been dominated by prominent rural and pro-China figures. Among them are legislator and chairman of the Heung Yee Kuk, Mr Lau Wong-fat, the chairman of the Regional Council, Mr Cheung Yan-lung, kuk member Mr Chan Yat-sun and kuk adviser Mr Kan Fook-yee. All are also Hongkong affairs advisers to China. The federation's secretary-general, Mr John Ho Tung-ching, denied the move was to prepare for the setting up of the ''second stove'' by China before 1997, saying it was just a natural development in response to political changes. Mr Ho said neither China nor other organisations had been consulted on whether to go ahead with the party formation plan. An electoral affairs committee was formed to prepare for the new party and map out strategies for the 1994-95 elections. Since its inception in 1991, the federation's membership has grown from 124 to 1,000. Of those, 15 are members of China's National People's Congress and Chinese People's Political Consultative Conference and are Hongkong affairs advisers. One-fifth of members are members of the kuk and rural committees and another 75 are members of the three tiers of government. The federation has pledged to support the Sino-British Joint Declaration and the Basic Law and to promote political and economic developments conducive to preserving prosperity and stability in the territory. About a dozen members also hold membership in other political parties or groups. Mr Lau and Mr Cheung, the federation's vice-chairmen, are members of the preparatory committee of the Liberal Party, which does not allow cross-membership. If forced to choose between the two parties, Mr Cheung said he would prefer to stay with the federation's party because many of his life-long friends were its members while Mr Lau had yet to decide. But Mr Lau ruled out the possibility the two parties might merge.