There wasn't much the UK could have done about Hong Kong. Like you said, water was an issue, and had already been an issue in the past. However, there was something the UK could have done about Hong Kongers. And it did. It changed the definition of UK subjects, previously meaning both those on the mainland and in the remaining colonies, to exclude Hong Kongers, so that fleeing Chinese would not be able to move to the UK as British subjects.
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