CHEK Lap Kok and the airport core projects will more than double tourist retail spending by 2000 and should be a shot in the arm for Hong Kong's developing debt market, says a new report. The Bank of East Asia's economic analysis section said the new airport would be able to handle 35 million passengers and 1.5 million tonnes of air cargo annually with one runway. 'With two runways, it could handle 80 million passengers and nine million tonnes of air cargo per year,' the bank's report said. 'The economic impacts of the new airport are as extraordinary as its physical expansion. 'It will not only complement the fast-growing tourist and air cargo industries, but land development along the airport railway will also greatly affect the property market.' In addition, the enormous demand for capital to finance the projects and related land development would have a deep impact on the development of the financial market. It would help ease the trade deficit and should translate into gross domestic product (GDP) growth. 'In the end, the effect of the new airport will be felt throughout the economy for years to come,' the report said, citing tourism as a major part of the impact. 'Tourism is the second-largest earner of foreign exchange for Hong Kong. 'In 1994, 9.33 million visitors came to Hong Kong, and total tourism receipts amounted to $64.3 billion, accounting for an estimated 6.3 per cent of the territory's GDP. 'From 1997 to 2000, an estimated 11 million more tourists will fly to the territory, with total tourist spending forecast to increase by an additional $73.4 billion.' After 1997, the airport could accommodate the increasing number of mainland visitors, while Hong Kong would remain a favoured stop-over for travellers to China, it said. With retail and hotel sectors accounting for more than three-quarters of total tourist spending, the impact of the airport could not be ignored, the report said. 'In 1994, tourist spending in the retail sector amounted to $32.5 bil-lion, close to 15 per cent of the territory's total retail sales. 'Due to the opening of the new airport, growing tourist arrivals are expected to spend an extra $35 billion in Hong Kong by 2000.' The building of nine hotels along the airport railway would help generate an estimated $18 billion in tourist spending by 2000. Indirect effects on the capital market were sizeable, it said. Debt issue capitalisation rose more than 40 per cent to $267 billion in the first 11 months of 1994, compared with 1993. The airport meant an estimated $143 billion would be raised, including the money for the Provisional Airport Authority (PAA) and Mass Transit Railway Corp (MTRC) projects. 'Much of this capital will be raised through the local capital market, providing stimulation to the recently quiet stock market and bank loans business,' the report said. 'Also, as the PAA and the MTRC are expected to raise a considerable portion of capital through medium and long-term debt issues, they will help develop the long-term bond market. 'Moreover, the volume of turnover is expected to rise with the increasing number of issues. This will increase the liquidity of bond trading in the secondary market, making bonds more attractive to investors.'