Advertisement
Advertisement
South China Sea
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more

HK stays lost in the clouds as skies open all around us

Joseph Lo

If Hong Kong's future as a business and trading gateway to the mainland can be measured by the openness of its international aviation agreements, we began to fall behind under the Tung administration.

Over the past year, three important sets of bilateral talks took place between our air-services negotiators and their counterparts from the mainland, India and Japan.

These three national markets in Asia are important to Hong Kong's economic potential. Yet, all the talks failed to meet industry expectations and provide real opportunities for expansion.

Given the increasingly liberal air-services deals being struck across the region - India has completed an open-skies deal with the United States, while the mainland has done the same with Thailand and signed a deal with Washington that came closer to an open-skies pact than anyone had previously dared imagine - Hong Kong, once a leader, is now lagging.

But the situation can be rectified this year, as we look forward to renewed negotiations with India and the US on enlarged pacts and as the European Union presses for talks on a possible pan-European deal.

Still, Below Deck will not be holding its breath, given the oft-repeated criticism of the ivory-tower mentality of the Economic Development and Labour Bureau officials.

In the words of one industry observer, Hong Kong will be much better off if the new Tsang administration takes a more pragmatic approach and brings its negotiators 'closer to the ground'.

'We often talk about Singapore Inc, where public and private-sector interests work together to achieve common goals. Hong Kong needs to adopt that kind of thinking,' he said.

Officials, though, reject such criticism. They say their mandate is to negotiate steady progress towards liberalisation for the Hong Kong aviation industry with an emphasis on the wider public interest rather than that of individual private companies.

Bilateral partners are free to reject Hong Kong's proposals if they do not see merit in them, officials say.

No one disputes this, but it is odd that officials at the bureau can appear so insensitive to the needs of our important trading partners that proposals framed in recent talks have failed to provide a reasonable starting point for negotiating truly liberal deals.

In protracted talks with the mainland last year, Hong Kong airlines came away with a mere incremental rise in passenger flights to mainland cities; with Japan, progress was limited to 12 new weekly cargo flights.

The Indian talks in late January ended disastrously. There was no expansion of services at all. Indeed, industry executives say the negotiations may have even harmed relations with the sub-continent as the Indian delegates were said to have been irate at what they considered was a lack of sincerity from their Hong Kong counterparts.

A common thread in all these talks was that Hong Kong offered fifth-freedom rights beyond Chek Lap Kok to the foreign carriers involved, largely in exchange for new flights to cities in those countries for local airlines.

In general terms, beyond rights are equivalent in value to gold, while direct services are silver. This implies a deep generosity on Hong Kong's part - appearing willing to give up more than it would receive.

However, such generosity can easily be interpreted as being insincere if the trading partners do not want more beyond rights than they can handle immediately as seems to have been the case with the Indians.

They wanted to secure limited rights for Jet Airways, the country's biggest private carrier, to fly to Los Angeles from Hong Kong.

Looking beyond India, a prospective local carrier, Oasis Air, says it wants to secure rights to fly to secondary cities in Europe. Whether it can will depend partly on the bureau's success in signing a new expanded agreement with the EU.

But that could also open a Pandora's box of other competitive issues, such as Cathay Pacific Airways' transatlantic plans and the increasing focus of major European carriers on the mainland.

Beijing is likely to use an EU-Hong Kong deal as a template to forge its own liberal agreement with Brussels, possibly to the advantage of Guangzhou, our biggest rival in southern China.

Below Deck thinks it may be worthwhile for Hong Kong to climb down from its ivory tower, take a step back and make a frank commitment to the importance of having Asia's most liberal aviation regime before the damage to our economic potential is made permanent.

Post