This cover appeared in an Internet Auction but I find a number of concerns that might indicate that it is an altered cover.  Here are my concerns together with data which supports the validity of the cover: -
    1)  The Canton CDS on the obverse is NO 19 / (18)78.  The Hong Kong - U.S. Postal Convention ceased when Hong Kong joined the UPU April 1,1878. Therefore this cover should have been charged the regular UPU rate between countries in the UPU of 12 cents (HK) / half ounce for all routes (Atlantic or Pacific), except for the Brindisi route.  References: Webb & Proud. Apparently it has been paid only 8 cents with no evidence of postage due.
    2)  On April 1, 1879 Hong Kong announced a reduced rate between UPU member countries of 8 cents / half ounce (except for Brindisi).  This lasted only until February 18, 1880 when the familiar rate of 10 cents (HK) became effective for UPU member countries via all routes.   But these rates are too late for the subject cover.  Reference: Webb.
    3)  The San Francisco CDS is JAN 3 (assumed to be 1879).   This matches the arrival of the ship "Belgic" (Occidental & Oriental Steamship Co.) from Yokohama on Jan 2 after a 20 day transit.  The mails were often processed the day after ahip's arrival.  Reference:  Halliburton, Roger &Spaulding - I.S.J.P. Monograph 3 - "Pacific Crossings From Japan, 1858 - 79"
    4)  No mention was made regarding the reversa side of the cover.   It should have received a transit CDS for at least one of the following: Hong Kong, Shanghai, Yokohama.
    5)  The HK 8 cents stamp is crudely tied to the cover by a well worn C1 obliterator. Does the cancel color match the Canton CDS?  Well, difficult to tell from a scan but not quite as it appears.  Also the Canton CDS is weak and looks well worn.
    6)  The C1 obliterator is a chief cause for concern.    It appears to be very worn and dirty, or both.  Compared with my own copies of this cancel, I have no examples which look anything like the one on this cover.   The points if difference are:
    -  If you would draw a line through the middle of the "1" and then a line parallel to the obliterator lines, it will show that they are not perpendicular as they should be, but are about 10 to 15°  off.
    -  The inner edge of the "C" is straight, whereas it is a smooth curve on all my copies of the C1 cancel.
    -  The obliterator bars are noticeably thinner than on most of my copies.
    -  The double ((   )) on the sides of C1 are not discernable.
    7)  Did the Canton Post Office make a mistake?  It's doubtful - as stated in your question "C1 covers to USA earlier than Oct. '78 have been seen bearing the correct rate of 12 cents". 
    All in all, one needs to get a certificate for the cover from a reputable expert group. The orginal stamp may have been replaced and a new stamp put in with either a genuine C1 cancel or a stamp bearing a fake cancel.