HK’s infrastructure development must coordinate with the PRD
The Hong Kong government and its Shenzhen counterpart signed a memorandum of understanding on Jan 3 concerning the joint development of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop. The media in Hong Kong were generally positive about this, but some also warned Hong Kong against helping other places at its own expense. This again shows the media bias against any cooperation between Hong Kong and the mainland.
A case in point is an opinion piece published in Sing Tao Daily on Jan 2 under the headline “Aviation industry’s rosy picture won’t hide worries for long”. This quoted industry insiders as criticizing the SAR government for deciding to let the aviation industry instead of the Airport Authority bear the cost of building the third runway at the Hong Kong International Airport (HKIA). But it also warns society as well as the government that what happened to the city’s container ports might happen to its aviation industry.
The article goes on to say, “When talking about Hong Kong’s competitiveness, aviation industry insiders also pointed out that, dazzled by its current prosperity, people may have overlooked that Hong Kong used to be known for a good many international flights it handled but now it is the mainland cities The author is a senior research fellow of China Everbright Holdings. which are enjoying 30-40 percent increases in international flights. The days when Hong Kong dispatched more flights to the mainland are gone. The decline of customer volume that Hong Kong’s airport has suffered in recent years will hurt the aviation industry if the trend continues. Hong Kong must open more air routes if it wants to maintain its lead in the regional air transport market, but challenges from the mainland are growing in terms of airport capacity and operational costs.” In the end the article concedes, “To airlines the present prosperity evidenced by the busy HKIA can hardly hide growing worries about Hong Kong’s diminishing competitiveness, which will continue to haunt the city’s aviation industry with or without the third runway.”
What the Sing Tao Daily column did not say is that like container port operators (who coped with a decreasing number of customers by shifting their focus from Hong Kong to mainland ports such as the Yantian port in Shenzhen), airlines will eventually do the same. In other words, it may be the HKIA instead of the airlines which suffer in the end.
Construction of the third runway is already underway at the HKIA and cannot be stopped now. However, a crucial issue overlooked or underestimated in the decision-making process must still be addressed. That issue is that, when planning major infrastructure development projects, Hong Kong must continue to coordinate with other cities in the Pearl River Delta (PRD) region.
The PRD cities are sometimes referred to as “9+2”, which means nine in Guangdong province and the two special administrative regions of Hong Kong and Macao. Currently there are three major international airports in the region already — in Hong Kong, Guangzhou and Shenzhen. Incidentally, these three cities also have major seaports.
Shenzhen’s Yantian Port has surpassed Hong Kong’s Kwai Chung in terms of container throughput because the cost (both in time and money) of international shipping is lower via Shenzhen than via Hong Kong. The reason why Guangzhou Port has not overtaken Shenzhen is that the former does not concentrate on containers.
Now which international airport will be the next to overtake the HKIA, Guangzhou or Shenzhen? The answer is up to the authorities in charge of coordinating civil aviation activities in the PRD region. But the HKIA will no doubt be overtaken by its competition in Guangzhou or Shenzhen in the foreseeable future unless Hong Kong steps up its economic integration into the PRD regional development.
The Guangdong provincial committee of the Communist Party of China held its regular economic work meeting in Guangzhou on Dec 24-25, 2016. One of the new missions the province will accomplish in its socio- economic development is “stepping up the unified development of the PRD region with that of eastern and western regions of Guangdong”. Guangzhou’s and Shenzhen’s airports can cultivate sources of customers and cargo in mainland regions outside the PRD. But Hong Kong is restricted by an “invisible” (ideological bias) as well as “visible” (physical) border. This will make it increasingly difficult for Hong Kong to discuss market share and coordinating sources of customers and cargo even within the PRD region.
The central government has always been very attentive to Hong Kong’s interests in economic development. For example, the reason why the Hong Kong-Zhuhai-Macao Bridge does not land in Shenzhen is that it favors Hong Kong. However, the economy follows its own forces. No one can do whatever they want with disregard for the intrinsic laws of economics. Compared with other PRD cities, Hong Kong is the most adaptable to the laws of a market economy. It therefore must not expect or demand favors and privileges beyond what the market economy allows other cities in the PRD region and further inland. Nor should it pretend that the PRD region, or the mainland for that matter, does not exist. Hong Kong’s major infrastructure development projects must fit into the PRD regional development strategy.
Hong Kong is the most adaptable to the laws of a market economy. It therefore must not expect or demand favors and privileges beyond what the market economy allows other cities in the PRD region and further inland.