NEVER underestimate quality of life when trying to lure executives to a different part of the globe. Companies have found to their cost that they too often overlook the importance of quality of life issues in planning their business strategies. The resulting problems can frustrate or, at the very least, slow down the implementation of some of the best-laid plans. This is especially true of developing countries such as China or Vietnam, where senior managers end up spending large amounts of time - and money - organising their home lives. But can the same be said of Hong Kong? The survey by Political and Economic Risk Consultancy, which shows Hong Kong sixth in a league table of quality of life, suggests the situation is unlikely to get a lot better. Undoubtedly, it is a worrying trend for the territory when foreign firms look to other regions to house staff. But Hong Kong can cope. Its geographical advantage makes sure of that. Sitting at the edge of what will be one of biggest economies in the world in a few short years, and bristling with financial sophistication and a network of contacts second to none, Hong Kong remains the first stop on the road to the China economy. US investment banks have made clear that the territory is the prime target for establishing a foothold on the mainland. The real challenge facing the territory is not so much quality of life but whether Hong Kong can adapt to the post-1997 changes when rival bases such as Shanghai move to centre stage. Multinationals are in Hong Kong because at the moment they have restricted access to China. If that changes, post-1997, there is a danger of an exodus from Hong Kong. That is the real challenge that faces the territory - whether it can maintain its importance in a changed landscape. Earnings still the key LAST Tuesday's decision by the US Federal Reserve to raise interest rates by 50 basis points sent the markets soaring. It was hardly unexpected. For the past two weeks, the diehard bulls have been quietly saying the US economy is not as robust as feared and that inflation was not the phoenix we had all feared. Their views now seem to have gained credence across the globe, as evidenced by strong support for shares, particularly in Hong Kong, where the interest rate uncertainty has kept the market in the doldrums. Asian investors over the past few months have been spending a lot of time watching their screens for the latest US economic data and they can now concentrate on stocks again. As projected by Jardine Fleming, barring some world catastrophe, Asian companies excluding Japanese ones should report earnings growth of about 20 per cent in 1994 and 1995. Given the trading pattern of the Asian stocks, this strong earnings growth could mean higher equity prices. It may be useful to know that, over the past 10 years, earnings growth and equity prices in Hong Kong have gone hand in hand.