Hong Kong will need to rethink its logistics facilities development plans as several logistics centres are mushrooming in southern China, an executive warns. Hong Kong Association of Air Freight Forwarding Agents (Haffa) executive committee member, Victor Mok, told an open forum on Hong Kong Air Cargo industry recently that Shenzhen's logistics development was progressing rapidly, compared with the SAR. 'Since it is much cheaper to build the hardware in Shenzhen, it is a question mark whether Hong Kong needs such hardware,' he said. And while the Hong Kong Government is strongly promoting the SAR as an international logistics hub, a study shows that inbound re-exports, broken down into gateway flows and hub flows categories, have been slowing down over the past 10 years. Professor George Hui, of the National University of Singapore, defined gateway flows as goods destined for the Pearl River Delta via Hong Kong from Japan and Taiwan to be made into finished products before being re- exported. Hub flow is defined as cargo headed for the mainland, probably to Sichuan province and other parts of China via the SAR, but which are not destined for the Pearl River Delta. 'The relative decline in figures definitely showed a downward trend,' he said. In 1991, re-exports were up 29.77 per cent while inbound gateway flow and hub flow was 15.7 per cent and 14.7 per cent respectively. In 1995, re-exports increased to 41.6 per cent while gateway flow and hub flow also rose by 20.5 per cent and 21 per cent. In 1999, however, re-exports fell to 28.5 per cent while gateway flow dipped to 15.5 per cent and hub flow declined to 13 per cent, Professor Hui said. Asked whether China's infrastructure was ready for logistics services, United Parcel Service senior vice-president Greater China, Perry Chao, said some parts were ready while others were not. He said there was room for further development. 'One area that needs to be improved is the information flow, and another is moving goods through Customs.' Chinese University of Hong Kong associate professor of Business Admin istration, Cheung Wai-man, said he did not think information technology tools in China were capable of supporting logistics development. Many Hong Kong companies were developing their own software at a heavy cost, he said. Hong Kong's assistant commissioner of Customs, David Tong, said comparing the customs services in Hong Kong with those in China was like comparing 'apples and oranges', as the SAR remained a free port while in the mainland tarriffs were common. Nevertheless, China's customs services had improved, he said. Regarding cargo services at the Hong Kong International Airport, Mr Tong said about 80 per cent of air cargo was often cleared electronically even before carriers could land.