THE political row over Container Terminal 9 (CT9) has obscured the economic issues surrounding the future of Hongkong's port. Kwai Chung is the world's busiest container port, and in private hands, unlike most of the world's major ports. Growth has been exponential: every two years, traffic through Kwai Chung grows by 1.5 million TEUs (twenty-foot equivalent units), a figure that is all the more staggering when put in perspective. The increase, every 24 months, is equal to the entire volume of Felixstowe, which is Britain's biggest port. Hongkong's port is one of the territory's biggest success stories, largely due in recent years to China's economic boom, yet in its success could lie the seeds of its demise. Up to 65 per cent of traffic comes from China, a proportion that is certain to increase and, although there are few rivals for the business at present, it is not always going to be so. In the past, infrastructure has been constructed with little regard to the territory as part of an integrated Guangdong economy. The Lo Wu border post has restricted not only personal movement northwards but also the thinking of Hongkong's planners. The results of this stand-alone thinking are constraints on the port's future growth. The biggest is that it is the only major port in the world without a railhead, despite two decades of campaigning on the part of port operators. That is not a problem for goods from southern Guangdong but as the economic boom moves inland it becomes a factor; rail transport is generally cheaper than road for distances over 200 kilometres. Even if work was started on a rail link now - and that doesn't seem likely - it could be too late to cope with China's growth. To meet anticipated demand, Shenzhen authorities are looking to expand their own deepwater port at Yantian and have approached local hongs Hutchison and Wharf to be involved. It seems that for Wharf the southern end of its Hongkong-Plus-Plus concept is Yantian and not Kwai Chung as previously thought. (The Plus-Plus idea provides for container traffic to be freighted by rail from Wuhan in the centre of the country to the southern coast.) For Hutchison which holds the majority stake in Hongkong International Terminals it could be a case of not wanting to put all its eggs in one basket. Port development in Hongkong is becoming prohibitively expensive. Every berth at CT9 will cost $3 billion, almost double that of its predecessor CT8. While the new development might not have an impact on existing terminals in Hongkong, it could affect the viability of CT10 and other proposed terminals on Lantau island. There is no room for complacency. SOMETIMES it is hard to see the forest for the trees. In a week in which New China News Agency's director, Mr Zhou Nan, renewed the pummelling of Hongkong's business confidence - his comments wiped almost three per cent off the Hang Seng Index - Guangdong's governor, Mr Zhu Senlin, unveiled an economic blueprint that was bursting with confidence. His 20-year plan for Guangdong sees the province as the next Asian dragon, joining the ranks of the developed world before 2010 with per capita gross domestic product reaching 20,000 yuan (about HK$26,000), a six-fold increase from the current 3,440 yuan. Last year, the province's GDP increased by 19.5 per cent, making it probably the fastest growing economy in the world. And yesterday, director of Guangdong Provincial Commission of Foreign Economic Relations and Trade, Mr Xu Dezhi, announced that the province's exports in 1992 totalled more than US$18.45 billion, up by 31.8 per cent compared with 1991. Economists anticipate a slowdown soon but, like a snowball rolling downhill, the momentum now seems unstoppable.
