CHINA'S latest broadside over airport funding should have resulted in an ominous sense of deja vu. In late November of 1992, exactly the same threats were being issued by Beijing over the invalidity of contracts and leases. The big difference was the reaction by the Hang Seng Index. Yesterday it hardly moved out of its recent, admittedly fairly volatile, trading range. In 1992, it crunched from 6,000 to 4,900 in a matter of days. The subdued reaction to China's latest threats would appear to support the theory that politics and economics have been completely uncoupled. But if perceptions change, the reaction of the Hang Seng Index could be as violent as in previous encounters. Some analysts believe it could be even worse. There are serious concerns in some circles that international investors do not recognise, or understand, the process of fraying tempers and manoeuvring that is now occurring. It is not just what is being said that is worrying - many of the accusations and threats are almost word for word what we have heard before - but the increasingly bitter tone of the exchanges, and the communications gap. Many of the players who drove up the market are a long way away. They understand gross domestic product figures and low price-earnings multiples and have read about the economic miracle. To them, the political issues are either incomprehensible, or a side-show that will somehow disappear. They are unlikely to know, or care, that Governor Chris Patten has started to snap back. Some observers in Hong Kong, who know about UK politics as well as local affairs, have noted the strong reception that he received in London. Any Chinese expectations of a split between the territory and Whitehall appear wishful. Even the opposition Labour party was largely supportive. There is now a view that Mr Patten has little to lose by standing firm, while the Chinese have painted themselves into a corner over the airport and other issues, but will be unable to work themselves out of it because of Beijing politics. From this flows the fear that relationships will deteriorate further, and there will come a moment when the overseas investors do start to notice what is going on politically. A market that has been driven as much by liquidity as by the firm fundamentals could suffer when the tide of cash starts to flow rapidly in the other direction.