Meant to deal with the HK issue up front but has become fairly standard to do without that optional rule. I once owned the board game along with having run postal, ftf & pbem Colonial games. As a balancing tool the optional rule (once always used) was that HK is not an sc for China if captured. "Just another little province/isle for C while important trading post for B" was put forward. Realpolitik & most games don't cotton to that. While I used to go with the rule the change in the way players play Colonial has made it less necessary. That's my thinking.
Colonial was a rushed game in developement like many Avalon hill games ( I suffered through early 3rd Reich; Tobruk; other AH true wargames). Balance, rules, map all had issues. If go to letter of rule, no one can use Suez unless a unit is in Egypt. Ridiculous. As long as owner has a line in orders(ie Britain can use Suez)allowing use by another player we're good to go. No problem acknowledging canal could easily be blocked to outsiders without an army or navy via scuttling or the like. Old Moulmein Pagoda set some online standards & us Gms have are own.