You can find the heart of Hong Kong at the $2 betting window of Happy Valley racecourse or the cushy visitors' gallery of the stock exchange.

This is a gamblers' town, a wide open, sky's-the-limit place where more than half the population fled from Chinese revolutionary Mao Tse-tung's threadbare paternalism for a roll of the capitalist dice, where small entrepreneurs plow back all their profits into bigger, riskier ventures and where tycoons keep raising the stakes.

Suddenly, they are beginning to ask: Can the house cover the bets?

Hong Kong, a venture built on faith, is wobbling with self-doubt. The Communist government in Peking has served notice to the British colonial authorities here that their leases from the last century will not be renewed in 1997 and that it eventually plans to reclaim its territory, which is the kind of talk that sets off alarms from the brothels to the board rooms of this so-called cultured pearl of the Orient.

The financial crash that came hard on China's Sept. 23 declaration is understandable in a city running on a psychological stimulus that amounts to, "I'm okay, you're okay."

"Confidence" is a code word for any bettor, but here it is sought like the Holy Grail. The long communist shadow from China, the sense of being in a borrowed place on borrowed time and the insecurities of the nouveau riche all make this financial market one of the world's most volatile.

"Shrewd gamblers never bet against time," explained Ronald Li, chairman of the Far East Stock Exchange here.

So it is for owners of the world's priciest real estate, for shipping magnates and manufacturers who rely on unrestricted and unpoliticized markets abroad and for merchants who thrive on Hong Kong's laissez faire policy that makes it one of the last bastions of unfettered capitalism.

A lot of them sold their stocks, and the market tumbled; they bought U.S. dollars, and the local currency plummeted in value; and they lined up for emigration visas to the West.

"People came to Hong Kong because it's the honey pot," said stockbroker Barry Yates. "They think the gold rush is on. If that gets taken away from them, what do they have left to live for?"

Indeed, people here are famous for two passions: making money and holding onto it.

No less than half the 5.2 million residents are said to be occupied in some form of business activity. Everyone seems to be selling something, from the Suzie Wong bars of Wanchai to the tailors of Kowloon. The myriad shops are worked by extended families with sons spelling fathers and cousins spelling sons while the weary rest in the backroom. Crowded, airless sweatshops work round-the-clock producing everything from plastic parts to three-piece suits.

These people look on Chinese communism as a gourmand might consider an empty table. In a recent poll, respondents called the opportunity to make money more important than a meaningful life, good food, material comforts, good clothing and even money.

About 400,000 immigrants swam here or arrived by boat from China since 1979, risking their lives for a chance to realize the Hong Kong dream. Penniless, they live in squalid camps called "squatter areas," enduring corrugated tin shanties, rats, open sewage ditches, floods and gang extortion.

When asked why they left their homes and families for this purgatory, many answer cheerfully with a popular Cantonese saying that means roughly, "To have a go at it."

"For people in Hong Kong," said trader Christine Loh, "hard work is a hobby for their children to enjoy."

Even when they break from work, they keep up the money drive. Mah-jongg, a game of tiles invented 1,000 years ago, is a mania for housewives and businessmen who wager a week's pay on a few rounds.

As much money is wagered on a good day at Happy Valley racecourse -- $35 million -- as changes hands in an average day of the Hong Kong stock market.

The stock and gold markets are highly democratic here. Bathroom attendants at the stately Mandarin Hotel analyze the latest ups and downs. A professional woman said her maid quotes the price of gold nightly when she serves dinner.

Small investors play the market by word of mouth, said stockbroker Yates, much as horse bettors take tips from racetrack touts. People buy and sell land like trading chips, realizing small profits in quick deals, rather than holding it as a long-term asset with recurring income.

"In an insecure environment," said Li of the Far East Exchange, "you are constantly looking for ways to make a fortune to protect yourself."

Hong Kong is a monument to that pioneering spirit.

Once described as "a pimple on the backside of China" without a single natural resource except its harbor, it has grown in 30 years from a colonial backwater into Asia's leading banking and trading post. Internationally, it ranks third in container ports, banking and diamond and gold markets. It is the world's largest garment and watch exporter.

The skyline looks like a slice of Manhattan, with its "golden mile" of hotels, boutiques and nightclubs bespeaking the glittering life of Hong Kong's new Chinese millionaires.

The most recent architectural contribution is a 50-story financial center covered with reflective, gold-colored glass. The shimmering building has been nicknamed "Hakka's Tooth" after the Hakka people in southwest China who like to show off their wealth by smiling.

Workers were reported to have drilled holes in one of the glass panes to see if they really were filled with gold dust, as advertised.

Despite its headlong rush into the modern age, Hong Kong now lives with its clouded future. The year 1997 has a doomsday ring here.

Li, who is a wealthy land owner as well as stock market manager, says Hong Kong is "like a Ferris wheel going too fast."

The big poser in this town of gamesters is where the wheel will stop.