GIVEN the choice between paying $110 for a new CD of The Bodyguard soundtrack and $60 for a slightly used one, what would the average buyer do? Since CDs are supposed to be virtually indestructible, Joe Public must be tempted to save $50 and buy the used copy - or the buyer may choose to rent from the growing number of rental outlets. At least that is what three major CD manufacturers in the United States fear. Not content with inflated financial statements due to the highest retail prices yet, Sony Music, WEA and CEMA are threatening retailers who sell used CDs with withdrawal of their access to new stock. As it is, at least three major US chain stores are selling used CDs because it creates more sales during recessionary times. And despite its comparatively healthy economy, Hongkong is also full of outlets - more than 100. Most offer the same sort of deals. For $12 you can sample an album for three days; after that, each additional day is merely $2. Since the fee is so affordable, operating a CD rental shop is a lucrative business. On an average day, a shop can lease out 120 to 150 albums. At Mongkok's CD Music City, about 2,000 CDs sell for a range of $20 to a high of $200 for rare editions. ''The pricing depends on how new or old it is, as well as quality,'' co-owner Neil Yin Lee said. ''We try to under-price other CD stores.'' And that includes retail stores. K. W. Kung, of Rock Records, in Wan Chai, one of the most up-to-date shops in Hongkong, admits used CD stores affect his business. ''I think CDs are affordable at $100 - the living standard [in Hongkong] is OK,'' he maintains. Mr Kung insists used CD stores undermine new retail businesses and even encourage theft and pirating. Ultimately, though, he sees consolation in the fact theydo not always sell the product the consumer wants. Mo Hui, owner of Multiform Records, a specialist shop for alternative releases in Mongkok, agrees. ''Yes, I do wish that the used CD stores here didn't exist. But the used stores don't have many items so they aren't a huge threat.'' However, the fact rental CDs lead to home taping is enough to have watchdog organisations considering strict action. ''If your company has invested millions of dollars on producing an album, you certainly want to recuperate your expenses and make a profit,'' said Patrick Wong, executive director of the local International Federation of Phonogram and Videogram Industry (IFPI) branch. ''You definitely don't want used and discounted copies to compete directly with brand new and 'properly' priced copies. ''They [CD rental stores] stifle our growth. Each year the industry collectively loses about $10-$15 million in revenues due to the loopholes in the Hongkong copyright act.'' But record company promotions staff are more vehement in expressing their feelings. ''It's very frustrating to see your efforts being undermined and taken advantage of by them [CD rental shop owners] - I guess the worst part is that they can get away with it,'' said Michael Chan, BMG's A&R manager. Charles Yip, promotion manager for CBS/Sony, said: ''To me, they are just a blatant bunch of parasites reaping what we have sowed, and they should be put in jail for that.'' Given the extent of the anger over the practice, why hasn't remedial action been taken? ''The problem is you can't prosecute the CD rental shop owners, because what they do is not a violation of the laws,'' said Willie Yeung, general manager of the Composers & Authors Society of Hongkong (CASH). ''Since the UK 56 Act neither provides the rental right nor forbids anyone from lending out a music recording, people can do whatever they want with the albums except broadcast them publicly. ''Five years ago, the British Government introduced the UK 88 Act which included rental rights and provision against unauthorised renting. However, the Act has yet to be implemented by the Hongkong Law Reform Committee.'' However, IFPI, alarmed by a survey which revealed as many as 50 per cent of the Hongkong respondents made home recordings, has supposedly taken steps towards regulating so-called ''rental shops''. ''In 1991, we asked the Government to give rental rights back to the producers. The Government, at that time, agreed with us. But they haven't done anything about it. We're going to take this issue up again next year when the copyright laws are up,'' Mr Wong said. If the issue is taken up properly, he claims IFPI will adopt a similar policy to that recently taken in Japan. ''In Japan, the producers now have control of newly-released albums. They can't be rented for one year after release.''