Business·Analysis

Hong Kong airport protests are a warning that violence is bad for business: Don Pittis

The reason business uses Hong Kong as its access point to China is convenience. But violence and airport closures could prompt a search for alternatives.

Hong Kong used to have a regional lock on business services, but not anymore

Despite a hair-raising approach between mountains and apartments, Hong Kong's Kai Tak airport was the best in the region. Now, despite a gleaming modern replacement, the threat of violence means business travellers may be seeking alternatives. (Reuters)

When my partner and I first flew into Hong Kong 30 years ago, the territory's Kai Tak Airport was notoriously ranked as one of the world's most dangerous.

The airport was built on a strip of reclaimed land out into Victoria Harbour, and the approach required a hair-raising sweep along and beneath the peaks of Kowloon followed by a low 90-degree pivot to line up to the runway. On the turn, downward-facing window seat passengers could see the washing hanging between the apartment buildings straight below.

Perilous as it was, if you wanted to fly into a modern airport in southern China, Kai Tak was the only game in town.

This week, as protester and police violence shut down flights at the Chinese territory's sprawling modern replacement airport on Lantau Island, Chek Lap Kok International Airport, Hong Kong no longer has a regional monopoly on modern air travel.

Hong Kong's business life blood

The closure of Chek Lap Kok is an example, a  warning if you will, of the changing position of Hong Kong in the world and in China. It is a reminder that if the Hong Kong government fails to find a peaceful resolution with angry demonstrators, the international business that is the territory's life blood will increasingly be forced to seek alternatives.

On stock markets this week, the threat, and the opportunities, made themselves apparent as shares in Chek Lap Kok's main carrier, Cathay Pacific, fell and shares in competing airports rose.

Unlike back in 1989, airport alternatives in the region abound. Hong Kong's business infrastructure is no longer the only game in town.

With Welcome to Hong Kong signs in the background, police clash with anti-government protesters at Chek Lap Kok International Airport, hurting the territory's reputation of convenience for businesses trying to break into the Chinese market. (Thomas Peter/Reuters)

The Pearl River Delta, where Hong Kong once reigned supreme in the services that international business requires, now swarms with state-of-the-art business infrastructure. 

Airports are just a single illustration. With 10 airports in the region, the delta is now considered to be the most crowded airspace in the world, and business passengers wishing to avoid Hong Kong violence are spoiled for choice.

A boom in alternatives

We flew out of Guangzhou airport once years ago, and in-flight service was a guy handing each passenger a can of Coke. Now the modern airport in the capital of Guangdong province, which added another new terminal just last year, serves more than 70 million passengers a year.

Shenzhen, created as a special economic zone on Hong Kong's northern border to replicate some of Hong Kong's pro-business techniques within what was then China proper, is now one of the world's most successful centres for technological innovation, with electric buses, modern buildings and clean streets.

In 2018 Shenzhen airport served 50 million passengers, and traffic was growing at 8.5 per cent a year, according to the data mapping service ArcGIS.

Following the violence in Hong Kong, shares in Shenzhen's modern airport rose 10 per cent in a day, the daily maximum permitted by regulators. (James Pomfret/Reuters)

Shares in the publicly traded company that runs the airport soared by the maximum 10 per cent daily limit permitted by market regulators. Shares in Guangzhou Airport hit a record high.

The tiny former Portuguese colony of Macau, where Europeans first set up shop in China in the 1550s and which later became a backwater where ferries took Hong Kong people to gamble, built its own airport out into the sea in 1995. Zhuhai, constructed as Macau's equivalent of Hong Kong's Shenzhen, has an airport of its own where passenger loads have been growing at 20 per cent a year.

Of course airports are just one example of a much wider phenomenon. The convenience that made Hong Kong a jumping-off point for business in China is no longer unchallenged.

That does not mean Hong Kong has lost its appeal for businesses, especially those coming to the China coast for the first time. English, the common language of international business, is still deeper and more widely used in Hong Kong. Important signs are almost always also in Roman characters.

Violence: the epitome of inconvenience

Of course that also applies in nearby business cities outside China such as Singapore, Kuala Lumpur and Manila. The appeal of those alternatives could grow if China sends the People's Liberation Army into Hong Kong, sparking a global backlash.

The rule of law and free speech, the confidence that the police are not likely to take you away in the night — the very things Hong Kong people are demonstrating for — remain a comfort to business travellers wary of an autocratic Chinese bureaucracy.

But free speech and peaceful demonstrations are one thing. Tear gas and smashed heads outside your hotel or in the airport arrivals area are quite another.

The Hong Kong government, demonstrators, the Hong Kong Police Force and the leadership in Beijing must all realize that for international business people who have come to the territory because of its global sophistication and convenience, violence is a deal breaker. It is the epitome of inconvenience.

As a trade war with the United States threatens China with economic instability and the world waits for recession, failing to work out a peaceful deal would be an unnecessary self-inflicted wound for everyone involved.

Follow Don on Twitter @don_pittis

About the Author

Don Pittis

Business columnist

Don Pittis was a forest firefighter, and a ranger in Canada's High Arctic islands. After moving into journalism, he was principal business reporter for Radio Television Hong Kong before the handover to China. He has produced and reported for the CBC in Saskatchewan and Toronto and the BBC in London. He is currently senior producer at CBC's business unit.

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