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According to dialogue in the film, China owns the island and leases it to Scaramanga in exchange for the occasional free assassination. Before defecting back to the British, Gibson worked for Hai Fat and built him a solar power plant based around his Solex Agitator. Scaramanga had gone into partnership with Hai Fat to recover the Solex agitator. While working for Hai Fat, Scaramanga presumably "borrowed" men (who run a lookout station and inform Scaramanga of Bond's approach) and equipment to build a second solar plant and, once the Solex is put in place on his island and the plant is up and running, Scaramanga will ransom the technology to the highest bidder.
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