It’s Already 1997 for Much of Hong Kong : China takeover: Westerners pour in, the economy booms and a communist scion becomes an accidental philanthropist.

The Brits are losing Hong Kong in 1,000 days, but Westerners are not fleeing the prospect of imminent Chinese rule, they are pouring in. The U.S. contingent has doubled in size since 1984, to 30,000, and includes a large squadron of investment bankers whose presence puts upward pressure on the already high apartment prices. The Japanese are flocking here as well, hoping that the Chinese don’t carry grudges, and even the Brits have multiplied, from 17,700 to 24,700, at the very time you’d expect them to be leaving.

The biggest influx by far is Filipina maids, 116,000 by official tally. The Chinese don’t do housekeeping work anymore. They’ve got better prospects, thanks to the capitalists who operate freely on both sides of the Hong Kong-Chinese border.

I surveyed that border on an hour-long helicopter ride sponsored by Government Information Services, my hosts on a recent junket. We flew into Chinese territory where the water buffalo once roamed but now the bulldozers and front-end loaders play as south China is transformed into a great eyesore of prosperity--factories, low-rises, high-rises and smokestacks--built with Hong Kong money.

Whereas Cuban exiles in Miami have refused to do business with Cuba as long as Fidel Castro is in power, Chinese exiles in Hong Kong have been merrily making deals on the mainland since 1979, when Deng Xiaoping said the magic words: “To be rich is glorious.”

“1997 happened a long time ago,” says Iain Donnachie, an Australian who runs money for an outfit called Asia Equity. He’s telling me this over lunch at the China Club atop the old China Bank building, the former headquarters of the communists, which now attracts the downtown finance crowd. Tables are set with silver chopsticks and the waiters are dressed in Mao suits. We’re surrounded by money managers and Hong Kong millionaires with dual passions: investing and playing the horses.

Hong Kong is a tout’s paradise--betting on the races accounts for 8% of the gross domestic product. There are too many bettors and not enough horses, a problem that was solved with the building of a ghost track, where people cram in by the thousands to watch giant overhead screens. The cheering from the ghost track is just as loud as the cheering from the primary track, where the live horses can be seen. It was at the primary track where Larry Yung made his fabulous ghost bet, the most interesting story I heard in Hong Kong.

Yung is not your average plunger. He’s one of the new breed of billionaires from the communist side. His father is a vice president in the current Beijing government, but Yung left China in 1979 to seek his fortune in Hong Kong. He got into semiconductors, and one thing led to another, until a year ago when Yung became the first mainlander to be named steward of the Royal Jockey Club--safari hats, English roses, the most elegant of Maughamian enclaves.

He owns and bets on horses in the efficient Hong Kong way, with a hand-held computer that makes the wager and debits his bank account; if he wins, the proceeds are credited to his bank account, with no fuss and bother about cash and tickets. He was checking his balance one day when he noticed $37 million in Hong Kong dollars (about $5 million U.S.) he didn’t know he had. This was the payoff from a 100-1 shot that he’d bet by mistake.

That’s Hong Kong in a nutshell: A son of a communist official arrives, prospers, wins $37 million by accident and doesn’t realize it until he consults his hand-held computer. He donated the windfall to Stanford University, where his daughter is enrolled.

From what I can gather, Hong Kong is more relaxed about the Chinese takeover than it was in 1989, the year of Tian An Men Square, but that’s because of all the commerce. What the financial types are saying is that capitalism has gone too far to be stopped and that Hong Kong is China’s cash cow--a cow that Beijing would never be dumb enough to butcher.

The Chinese and the British already have agreed to the basic principle of the changeover: that China will not meddle in Hong Kong affairs and will leave the legal system intact for at least another 50 years. But both sides have been bickering over the details. The British keep referring to the rule book and the Chinese keep saying that they will make their own rules when they get here. It doesn’t help that Hong Kong’s current governor, Chris Patten, is a former government official from Bath, England, whose only prior experience with the Orient was in his neighborhood Chinese restaurant.

The Hong Kong media are practicing what is locally referred to as “self-censorship” in preparation for 1997. Already, the TV stations are being careful not to broadcast anything that might miff officials in Beijing. The Chinese are miffed about a lot of things, such as the contract for a new container port that was awarded to Jardine. Jardine is a British company that got its start smuggling opium into China in the 19th Century. It was on Jardine’s behalf that Britain fought the Opium War to defend the drug traffic and won Hong Kong in the process.

The British governors, meanwhile, have developed a sudden interest in domestic reforms--power to the people, elections for local legislators--none of which they bothered about until quite recently, when they started packing their bags.

As the Brits prepare to pull down the Union Jack, the Hong Kongers have surpassed them in GDP per person. It’s an amazing achievement when a colony becomes more productive and wealthier than the colonizers. In spite of its very low taxes and a high level of social services (good schools, 47% of the population in government housing), Hong Kong manages to run a budget surplus and keep itself out of hock. This poses a problem for the newly arrived investment bankers: With no government debt, how can you start a decent bond market?