[StainlessSteelCynic]

As far as I have been able to tell, the Sterling Armaments Company was still in existence up to at least 1987 as that's when the final versions of the rifle where produced (hence it's designation of SAR-87). The rifle itself was a joint project between Sterling and Chartered Industries of Singapore (CIS) even though the primary work was done by Sterling as a result of their experience manufacturing the AR-18.

However, even though Sterling went out of business as such, it did not disappear. It was bought out by British Aerospace who also had control of Royal Ordnance. The designs were kept into the early 1990s when I believe BAe allowed CIS to buy the full rights to the rifle. CIS produced some upgraded versions as the Singapore Assault Rifle but dropped the design later and focused on the manufacture of the bullpup SAR-21 rifle.

It should also be pointed out that the apparent reason that BAe closed down the Sterling facilities was due to the UK government's belief in the 'peace dividend' from the end of the Cold War. Had the Cold War continued, it's highly unlikely the UK Govt would have shutdown as many military projects as it did, (many of which were canned simply to save money).
While this does not mean the SAR-87 would have been put back into production, it does suggest that the designs and tooling could have been kept rather than sold in their entirety to Singapore and thus been available for manufacturing the rifle when the Sino-Soviet conflict escalates.

Edit: As a side note, the Singaporeans had made an earlier rifle,the SAR-80. Once they got involved with Sterling, they produced the SR-88 based on the SAR-80 and the SAR-87. Neither of the Singaporean rifles made enough sales to remain in production.