CHINA'S attack on inflation will have no or very little impact on Hongkong, according to Wardley Investment Services. Fears about the effect on Hongkong's economic prospects of a sharp cutback on credit in China are misplaced, it concludes. Wardley does not doubt that there will have to be a clampdown. Inflation has been developing for more than a year, and now affects most sectors of the economy, including the labour market, its analysts point out in their latest Asia Pacific Quarterly Review. The investment group reckons that the 15.7 per cent year-on-year increase in urban consumer inflation in the first quarter will almost certainly be followed by worse figures in the second and third quarters. ''China is growing well above its productive potential'' is the warning, echoed by others. The increase in gross domestic product, well into double figures, is outpacing the country's natural maximum rate of growth, which economists elsewhere estimate atno more than nine per cent. When the crunch comes, it will come in the form of a clamp on credit, using mechanical and administrative controls, rather than just tightening interest rates, according to Wardley. This will leave Hongkong relatively unscathed, thanks to the structure of China's industry, and the territory's primary involvement through joint ventures. These do not rely exclusively on domestic resources for their capital, unlike the state enterprises and collectives, yet most of their revenue is derived from overseas. This is especially so in Guangdong, which is heavily skewed towards joint ventures. Wardley estimates that 80 per cent of earnings from joint ventures come from exports and most funding is external, so they are largely insulated against a choking off of credit. Of course, there are exceptions: television manufacturers, for instance. But even they are moving northwards to escape rising wage costs and find growing markets. The real impact on Hongkong from a mainland assault on inflation is likely to be the impact on investor psychology. The worries, it seems, are mainly in the mind.