Hong Kong - airborne hours are airborne hours and the limits apply to the all hours spent on the iarcraft with the exception of deadheading. However, when crew augmentation is carried out duty hours can be extended. Under JARS, the same thing applies. But with a F/O or S/O, they claim the hours spent in the seat. But a Captain logs all the hours. If this were tha case with your operation, the captain will surely be logging well in excess of the maximum.
I suppose it comes down to how the relevant flight time limitations are written for that country. However, when there is little distinction between the airline and the regulation department (if I have your base correct!) as it appears they are the same body, there is a conflict bewtween safety and commerce. I would highlight this practice to the aviation regulation body of every FIR you fly through.