Hong Kong, a former British territory that returned to Chinese rule in 1997 under a deal that preserved much of its autonomy, has its own laws that include liberal publication rights.

As a result, mainland officials, businessmen and students eager to read up on China's most sensitive issues flock to the city's book shops.

"They want to know more about their fellow competitors - who goes up, who goes down and who's in trouble," said Paul Tang, director of People Book Cafe on the second floor of a shopping centre in the busy Causeway Bay district.

Tang attracts shoppers' attention with a portrait of Mao Zedong at the entrance of his shop and a sign in Chinese script promising "banned books".

China's ruling Communist Party chooses a new leadership team for the first time in a decade in a congress that began on Thursday. Speculation has been rife about whose stars are on the rise and whose are on the way down.

Sales of banned political books have gone up by 30 percent over the past year, Tang said.

His customers include men who he believes are Chinese intelligence officers who regularly fork out hundreds of dollars for books about politics.

"It's a major stop for information-gathering," he said of his shop.

High on the best-seller list of banned Chinese-language books are "Seven Members in the Standing Committee" by Xian Fe and Cheng Gong and "New Biography of X i Jinping" by Liang Jian.

Xi is expected to become China's top leader at the end of the week-long congress.

Promising a more racy read is "Mistresses of Top Officials in the Chinese Empire" by Shen Lin and Fang Yan Hong. Another favourite is "China's Best Actor: Wen Jiabao" by activist Yu Jie. Wen is the outgoing prime minister.

Tang said businessmen were eager for books that offered insight into how the leadership transition could affect them.

"TOO SENSITIVE"

The leadership change has been marred by the downfall of a former top leader, Bo Xilai, which has exposed rifts in the party as it tries to pull off a smooth transition against a backdrop of murder, plots and prison sentences.

Another book-shop owner who only wanted to be identified by his surname, Lin, also said tight-lipped mainland officials regularly browsed his shelves.

"They won't tell you a thing but you just know they're officials in the government or military," said Lin, owner of the Causeway Bay Bookstore.

China has long banned books it deems a threat to the leadership or to stability. But a ban often fires interest in the book across the border in Hong Kong.

In the nearby Best Reading Bookstore, publications billed as

"politically sensitive" fill nearly half the shelf space. Their sales have jumped almost 50 percent over the past year, said assistant manager Mag Chan.

Mainlanders, who have to get a visa to visit Hong Kong, trade tips on Weibo, China's version of Twitter, on how to smuggle books. Some suggest the old trick of putting them in innocuous covers.

Zhang Qianye, 25, a mainlander who works in Hong Kong and often takes banned books to China, said customs officials caught her in March with a book about Liu Xiaobo, a human rights activist who won the Nobel Peace Prize in 2010.

The agents confiscated the book but that won't stop her trying again.

"Information is destined to be free-flow. Customs just can't stop it," she said.

Back at Tang's shop a middle-aged mainlander surnamed Zhang said that with the congress on, it was far too risky to try to smuggle books back home: "The timing is just too sensitive".

But after a couple of hours of browsing, he seemed impressed and emboldened by all the "insider news" on offer.

"I guess it should be all right if I just take one," he said. (Editing by Anne Marie Roantree and Robert Birsel)

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