Hong Kong watches warily as huge new Chinese airport opens

THE largest airport in China opened in the southern city of Guangzhou Thursday, establishing a giant freight and passenger hub in the country’s manufacturing heartland to rival neighboring Hong Kong.
Baiyun International Airport in the capital of Guangdong Province — dubbed the factory of the world which is responsible for over a third of China’s exports — can handle 25 million passengers and one million tons of cargo a year.

Booming Guangdong had been waiting for years for a new airport, watching while rival cities such as Beijing and Shanghai received major upgrades.

The new airport is China’s largest by area — capable during peak hours of handling 9,300 passengers and 67 take-offs and landings per hour — and has space for five runways and eventual capacity for 80 million passengers and some three million tons of cargo.

Two China Southern Airlines flights — one bound for southern Hainan island and the other arriving from Los Angeles — were the first planes to grace its runways.

The 19-billion-yuan (US$2.4 billion) 15-square-kilometre (6-square-mile) airport is poised to become a major player in the regional aviation market, most notably at the expense of neighboring Hong Kong International Airport.

While the former British colony’s 1998-opened Chek Lap Kok airport less than 100 kilometers (60 miles) away handles more freight than any other in the world, analysts say Baiyun, in the centre of China’s manufacturing engine, would rob it of vital trade.

The chief executive of the Hong Kong Airport Authority, David Pang, admitted as much recently when he said: “The two airports are overlapping in markets and both will engage in competition for passengers and cargo transport.”

Some 80 percent of all freight handled there comes from Guangdong, accounting for more than a quarter of the city’s external trade value.

Sunny Ho, executive director of Hong Kong Shippers’ Council, said Hong Kong would face enormous challenges should the huge U.S. logistics companies, like United Parcel Service and Federal Express, choose Guangzhou as their Asian hub.

“It would be very easy for them to leave Hong Kong for Guangzhou if they wanted to,” said Ho. “Could Hong Kong be their only choice? It would be impossible.”

In addition, with a new U.S.-China aviation agreement signed last week, American companies will be able to establish operations in the mainland for the first time.

The deal will double the number of airlines flying between the two countries, allowing a nearly five-fold increase in passenger and cargo flights in the next six years.

The delivery giants have made no secret of their plans to expand into the mainland.

“China is not an option. It’s a must,” said Leung Kwok-kee, UPS’ general manager for Hong Kong and Macau told AFP. “Hong Kong alone is not capable of supporting its growth. There is a need to be there (Guangzhou).”

Hong Kong, which handles 35 million passengers and three million tons of cargo per year, still has the advantage as China’s aviation infrastructure struggles to modernize, said logistics consultant Russ Green of Hong Kong-based RTG Communications.

“Hong Kong has the global connectivity and the low tax and tariff regime that China doesn’t,” said Green.

Nonetheless Hong Kong has been forced to respond, offering reductions on landing fees for airlines flying to new destinations.

It could also face competition for the lucrative tourism sector, which and is only just recovering from the dire economic effects of the Severe Acute Respiratory Syndrome outbreak last year.

About 51.4 million foreigners visited the mainland in the first half of the year. The Spain-based World Tourism Organization has predicted China could end up attracting more visitors than any other country within the next decade.

GUANGZHOU, China
author: Agence France Presse

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