LIVING in Hong Kong and China these days is rather like being an exotic species of fish in a goldfish bowl. Men and women are flown in from across the globe to inspect us, watch us go about our daily business, drink afternoon tea and eat pastries in all our nicest hotels, talk to a few dapper local businessmen rolled out for the occasion, and then whiz back toKai Tak and the world beyond. The Americans started it - naturally - and now the Japanese are following suit. Generations of Japanese and American children will grow up with picture albums of The Discovery of Hong Kong and China. The great thing about these visitors, of course, is that they are all buying exceptionally handsome souvenirs - securities - and writing up such rave reviews when they get back, that Hong Kong is all awash with their greenbacks, yen, francs and pounds. So local investors can take a free ride on the rally, simply hanging on as the market inexorably rises. It should be a recipe for smiles all round, but in reality it's a recipe for disaster. It is easy to be won over by the bustle and free marketeering on the streets of Hong Kong, Beijing and Guangdong. It is easy to cite cheap price-earnings multiples and the imminent arrival of the great god of democracy in China. But it takes a little longer to discover just whatever happened to the economic slowdown in China, why urban inflation is continuing to rocket, and what will happen to Hong Kong's biggest money spinner of all, trade, as US-China relations grow increasingly frosty. Fund managers travelling to Hong Kong have of course heard all about Deng Xiaoping, but perhaps they have not all unravelled the complexities of the men-in-waiting, the question of who will replace him and how. Closer to home, it is easy to dismiss the Sino-British stand-off as no more than a particularly dull episode of a soap opera that has run out of steam. But when two sides want different things and compromise is out, there has to be a showdown on the cards. That showdown has yet to happen, and it is unlikely the ramifications will totally bypass the stock market. Liquidity is as good an engine as any to drive a market, until it dries up. If the foreigners discover they have been buying without doing enough homework, there could be tears before it's all over, both here and across the oceans.