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A R C H I V E S

E D I T O R I A L

WHO NEEDS HONG KONG?
by Geoffrey Arend

     Air cargo may be challenged inother places, but not if you are doing business with China.
     Right now that nation continent is so busy it could make your head swim.
     Amidst all the rush and go-go business it is not without a bit of nostalgia, that we report that what has been an exclusive 160-year trade advantage for Hong Kong, is like sand in an hour glass, slowly running out.
     Maybe you think we are nuts?
     After all, Hong Kong has the busiest multi-carrier cargo airport on earth, (Memphis for the record is number one but that gateway is a one-trick pony).
     Air cargo through its big, beautiful new airport (CLK) continues to grow in record number.
     But, everything and we mean everything else about Hong Kong is sliding, as the rest of China rises.
     Hong Kong could end up like that great fried chicken restaurant where your grandparents took you to eat on car trips, a touchstone of familiarity and security, which as the super highways were planned, ended up off the main drag.
     It’s not that anybody stopped Hong Kong. What happened is that the rest of China opened up and accelerated itself into world trade.
     Certainly Hong Kong will not disappear overnight, or even in ten years although at the speed events have propelled the 21st Century so far, by 2010, ten years may seem like a hundred.
     We publish this newspaper from LaGuardia Airport.
     Often we lunch in another part of Queens, New York just nearby called Flushing.
     Less than fifty years ago if you drove across the Flushing Bridge on Northern Boulevard, a big sign on the side of the RKO Keith’s movie house greeted you, saying:
     “Welcome to Long Island.”
     Today, if you look hard enough you can still see the sign although the paint has almost faded away into the brick.
     But even before the letters began to wash, the notion of Flushing as Long Island was gone, as the real borders of Long Island became apparent ten miles down the road.
     Development was that rapid, as New Yorkers, post World War II, settled into the Borough of Queens out from the city proper and the in-town neighborhoods of Brooklyn and Manhattan.
     Now the area called Flushing is brimming with Chinese people.
     It’s arguable that there is a bigger Chinese presence in Flushing than in the more famous Chinatown area of Manhattan.
     As mentioned, we love to crawl around Flushing. Sometimes being in Flushing feels like you are on a short vacation in another country, while here at home.
     Is America a great country, or what?
     But nobody we know in Flushing, who is talking China, goes to Hong Kong first anymore.
     Everybody in Flushing can tell you about someone who has gone off to what amounts to the first 21st Century gold rush, to pan out fortune in China.
     These new Asian prospectors are locating in the up and coming tomorrow cities of mainland China, Shanghai, Beijing and Shenzen.
     Hong Kong will still reap a windfall with air service as long as its efficient, or until something better and closer to the new China business comes along, we are told.
     Recently Fortune Magazine delivered a feature titled:
     “Who Needs Hong Kong?”
     “The tables have turned,” said Fortune.” “(Even) Hong Kong residents are looking in the other direction.
     “Recently more than 12,000 Hong Kong residents paid to meet job recruiters from mainland companies.
     “Hong Kong property values have dipped 60%. Unemployment is at 7%. Prices are down and deflation is becoming endemic,” said Fortune.
     Hong Kong seems stuck in the past while the rest of China is opening itself up to world trade. So like that chicken franchise under the highway, Chinese business doesn’t need Hong Kong as it once did.
     “When gateway Taiwan opens up, then just forget the number?” said Ray, the importer between bites of his steamed dumplings and scallion pancakes at Joe’s Shanghai in Flushing.
     “Hong Kong has had it. Shanghai is where the excitement, edge and energy is. I leave my wife to run our retail business here and spend ten months a year in Shanghai. We are creating all kinds of new import and export combinations with plenty of support from the Chinese government.
     “There is no question that right now Hong Kong still has a big part of the transshipment business to the mainland. The airport (CLK) is great and connections are easy.
     “But it’s a lot cheaper and better to set up long-range plans for business elsewhere. Put another way, Hong Kong’s exclusive franchise as middle- man to China is eroding daily.”
     HACTL who operates the cargo at CLK said that the first four months of 2002 saw more than 560,000 tons flow through the Hong Kong gateway, a 12.9% uptick from a year ago confirming the continued climb of China as the world’s fastest growing economy.
     Some positive long-term thinkers suppose that eventually China’s airports will resemble their service partners in America.
     Once upon a time the first place anyone wanted to fly in the United States was New York, goes the thinking. Later Atlanta, Chicago, Los Angeles and Miami emerged as more efficient U.S. destinations for logisticians.
     Although percentages of total business declined at New York, overall tonnage for the gateway has always increased.