When the diminutive dictator Deng Xiaoping was negotiating the arrangements for Hong Kong's return to the motherland after 150 years of British rule, he reassured the territory's jittery citizens that under his "One country, two systems" policy, things would remain much as they were.

"The same horseracing," he said, "the same dancing."

It was a shrewd promise to make. As much as a quarter of Hong Kong's population of about seven million turns its attention to the territory's two racecourses during meetings, with as many as 85,000 people showing up in person each day of the meets, the rest watching on television at home or at one of more than a hundred off-track betting shops.

Horseracing here goes back more than 150 years, its fortunes often reflecting those of China as a whole and its organization a microcosm of modern Hong Kong. While tourists bargain for designer bags or digital gadgets, residents are found at the racetrack. Visitors who go to the track instead can rub shoulders with a wide range of local society, and, unlike with shopping expeditions, the trip may pay for itself.

Two tour companies make it easy for the casual visitor or first-time racegoer, offering almost identical horseracing trips. The best choice is the Wednesday-night trip to see theatrically floodlit racing at the historic Happy Valley course on Hong Kong Island, where horses first raced in 1846.

The small group is whisked through the crowds to a side entrance and up to a members'-level box on the eighth floor with a fine view of the whole course. As one steps out of the box's air-conditioned comfort into the muggy tropical air of the balcony, it almost seems possible to hang-glide off the edge on the updraught of excitement from the crowd at track level.

The lush, green space of the course is surrounded by a cluster of towers, which seem to lean over it as if they have a stake in the races. The jockeys' clownish silks blaze beneath the floodlights and a giant video display on the far side of the track provides close-ups and replays. Screens of stock-exchange complexity tell the latest odds for 11 different wagers, including the combination bets favoured by the Chinese, such as the "quinella" and "quinella place", all willingly decoded by tellers at a private betting counter.

Horseracing has a long history of bringing together Chinese and foreigners, although things got off to a bad start. The same military action of the early 1840s that put Hong Kong under British rule opened five Chinese "treaty ports" to foreign trade and residence, where the expatriates lived almost entirely segregated amid a largely hostile local population. They built racecourses whose meetings became central to the limited social scene. Owners and riders were often the same and might also be the heads of large trading concerns.

Ann Bridge's best-selling British novel of 1934, The Ginger Griffin , begins with a diplomat's announcement of his new posting to China. " 'The riding...is first class, and the cheapest in the world. Quite average ponies for a tenner.'" Griffin was the term for newly arrived Mongolian ponies and newly arrived young expatriates alike.

Eventually, 100-strong "mobs" of these sturdy, short-necked beasts were herded down through the Great Wall, loaded onto trains, then shipped around the treaty ports, including Shanghai, and to Hong Kong, replacing the military horses that had run the first races.

The Chinese quickly took an interest in this foreign entertainment, but they had separate stands and were not allowed to become race-club members. In Shanghai, there were eventually three tracks: the original Shanghai Race Club and two more Chinese-run international clubs, where foreigners might ride Chinese-owned horses and vice versa.

When the language was equine, foreigners and Chinese communicated so freely that in 1927 an official of the Shanghai Race Club gave a speech in which he remarked of Chinese racing authorities, "So well do we get on together, that if the three race clubs had the power to rule the country, they would do it very well," and was cheered by an expatriate audience. But from 1949, it was Mao Zedong, Deng Xiaoping, and their contemporaries who took power, and the racing (and dancing) was suppressed.

Business families such as the Kadoories, who were displaced to Hong Kong, helped rebuild racing there, later starting some of the first sponsored races, such as the prestigious Peninsula Golden Jubilee Challenge Cup, named for their venerable hotel, which sends parties of guests every December.

Hong Kong was regarded by treaty-port foreigners as relatively stuffy and socially exclusive, but in 1927 its Jockey Club became the only foreign-run racing club in China to allow Chinese to become full members.

"A taxi driver can talk to a tycoon about horses," says Apollo Ng, who as a radio and television commentator talks about horses for a living but agrees that society is still highly stratified and that attendance at the races reproduces that in miniature. The curve of the various stands visible from the visitors' balcony is layered: the paying public is on the terraces at ground level, the guests of the members and the members themselves on the floors above, the wealthy owners yet higher, and the voting members, mostly tycoon class, on the top floor with the best view.

Ng publishes the bilingual form guide, Lowan's Racing Booklet , essential pre-race reading, as well as the glossy Racing World magazine. But he also puts his money where his mouth is: he owns racehorses, too. Membership, he regrets, is not easy to come by and is often marked by love of prestige rather than love of horses.

"Nowadays you need two voting members to vote you in, and there are only 200 of those in the whole of Hong Kong, all prominent members of society. It's a private club: it has its own memorandum and articles, and its own rules."

There are only 11,000 members altogether, who go through background checks by the club's security division and who pay a HK$250,000 ($42,000) joining fee. Only 800, drawn by ballot, have the right to own horses, and they must deposit a bank certificate for HK$400,000 ($67,200) to show that they can afford at least a year's overhead, which runs HK$30,000 ($5,000) monthly for stabling and training at Jockey Club--run premises. Another HK$40,000 ($6,700) must be deposited to cover the re-export of the horse when it retires. There's not enough flat land to run a stud or put retired animals out to grass.

"Some are in it for the money," Ng says, "but it's really a dream. I would say slightly less than 50 percent of owners manage to have their training fees covered by prize money. And I don't see more than 10 percent who race their horses often enough to cover the purchase price of the horse."

So despite some of the world's richest purses, with total prize money of more than HK$698 million (nearly $118 million) per nine-month season, ownership is also a gamble. But for some parts of society all gambling is anathema, and the road to hell is paved not with good intentions but turf.

Nevertheless, the club is Hong Kong's largest single taxpayer, contributing 11.7 percent of all inland revenue in 2002--03, and it's been estimated that to replace it, income tax would have to rise from 15 percent to 23 percent.

After Britain regained Hong Kong from the Japanese in 1946, the club decided that profits from racing would go to help rebuild society. The club's contribution to charities now amounts to more than HK$1 billion ($170 million) annually, which follows through on a lot of good intentions.

"But when people gamble, they don't care whether it's for charity," Ng says with regret. "And perhaps if you asked casinos to donate the same amounts of money, they would still be perceived as evil."

Tour-group members can go down to the floodlit parade ring to mix with the crowds making small bets and to glimpse those who've wagered rather more on the purchase of a horse--an average of HK$1.6 million ($270,000) in 2003. They stand next to the large brass bell and give last words of encouragement to their jockeys, who are still mostly westerners, many of them rising stars from the U.K., South Africa, and Australia. The horses pace past, snorting as if some internal engine is being revved up.

As displays at an excellent free museum at the club explain, the Boxer Rebellion of 1900 interrupted supplies of Mongolian ponies and started the import of horses from Australia. In 1971 the club began to import Arabs, and the days of the gentleman owner-rider came to an end, as racing went professional. The skeleton of Silver Lining, the first horse to win HK$1 million ($170,000) in prize money is on display, and visitors can mount a mechanical horse used in jockey training.

Back up in the box, a generous buffet of local and western dishes keeps guests oscillating between a view of the foie gras and one of the finish line. The upper floors consume 30,000 lobsters and half a million oysters a season, while downstairs 135,000 bowls of won ton soup disappear.

Many a British expatriate departing in 1997 said Hong Kong would go to the dogs. They were nearly right.

ACCESS: Cathay Pacific has far and away the best service from Vancouver to Hong Kong, with two nonstop flights daily. There's decent leg room for regular racegoers, and beds for tycoons in business as well as first class. Call 604-606-8888 or see www.cathaypacific.ca/ .

Grey Lines Tours and Splendid Tours & Travel offer tours (called Come Horseracing Tour), which can be booked through hotels and through the Hong Kong Tourism Board's offices. They run twice weekly during the 78-meet, end-of-August-to-mid-June season and cost HK$460 ($78), including transport to the track, dinner, a HK$30 ($5) betting voucher, and discounts at the gift shop. See Discoverhongkong.com for more details.

For those who can't wait, races from Hong Kong's Sha Tin course are simulcast at Hastings Racecourse on Fridays or Saturdays from 10 p.m. to 3 a.m. or 4 a.m., and live racing in Vancouver begins Saturday (April 17). See www.hastingsracecourse.com/ for details, or call 604-254-1631.

For pre-race reading--other than Lowan's Racing Booklet --consult China Races by Austin Coates (OUP Hong Kong, 1983), an entertaining history of horseracing in China, and Peking Picnic, the novel that made Ann Bridge a household name, quickly followed by 1934's The Ginger Griffin (reprinted OUP Hong Kong, 1985), a romance with plenty of horseracing set in 1920s Beijing.