IS business becoming harsher and more brutal, or is there still room to play fair, deal straight and make a profit? This, thankfully, if surprisingly, is a question not being ignored in Hong Kong. In May, the whole question of business ethics, and where they fit into a competitive society, will be aired at a major conference. This is part of Governor Chris Patten's drive to improve the image of business in Hong Kong, and has now attracted the support of a battalion of trade organisations, and assorted chambers of commerce (The South China Morning Post will also put itself behind the concept). What will emerge will be a serious look at the local way of doing business, and the effects on Hong Kong's future. Some of the outside world may see the territory as a single-minded money-making machine, dedicated to making one last fortune, at any cost, by 1997, but that is a story for hit-and-run foreign correspondents. The true picture is much less simple. Like everywhere else, Hong Kong has the full spectrum of morals - from the blatantly criminal to the rigidly respectable. Of course money talks here, sometimes it swears, and too often the public face of Hong Kong commerce is a Tsim Sha Tsui electronics trader playing ''gouge the tourist''. That hurts the image, but what would hurt more is an unremarked deterioration of standards at all levels of business. Any serious executive in town is now more worried about rising corruption than rising interest rates Identifying the hard cases is easy. The Independent Commission Against Corruption has no end of examples, and the Hong Kong stock exchange and the Securities and Futures Commission are ready to name the names. But ethics is a more difficult subject. What is the difference between tough business methods and unethical practice? Using your suppliers as a bank by not paying bills on time is good for cash flow, but it is bad for Hong Kong. Exploiting loopholes in planning regulations may help the balance sheet, but what does it do for the community? There obviously cannot be laws to eliminate all the grey areas, but it would be a step forward if the conference produced a clear idea of the form that a proposed code of conduct for Hong Kong companies should take. That would be extremely useful insofar as it set a yardstick that listed companies would have to measure themselves against. It would be extremely limited in that unlisted companies would have no incentive to follow the code as they face no shareholders armed with an ethical tick-sheet. What all companies in Hong Kong have to gain in the long term is an enhanced view of the territory as a place to do business. No one wants to deal in a thieves' kitchen, and every step taken to clean up our commercial act is a potential customer won.