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Christine Chan

John Swire & Sons (HK) has announced a HK$4 billion retail-office project in Guangzhou and pledged greater co-operation between Cathay Pacific Airways and the mainland's three biggest airlines.

Chairman James Hughes-Hallet yesterday said the company would take a 55 per cent, HK$2.2 billion stake in Guangzhou Pacific Place, which will be modelled on the upmarket Hong Kong complex of the same name.

Its Chinese partner, Guangzhou Daily, holds the remaining stake.

Located in downtown Tianhe district, the project includes a five-star hotel and a retail and office complex. It will be about two-thirds the size of its Hong Kong counterpart.

John Swire & Sons (HK) is the Hong Kong holding company of the Britain-based Swire group with businesses in property to aviation, beverages and distribution.

It also controls locally listed Swire Pacific and Cathay Pacific Airways.

Mr Hughes-Hallet said he chose Guangzhou because 'Taikoo' - the Cantonese version of Swire - was a household name in the Cantonese-speaking capital city of Guangdong province.

High-spending Guangzhou was a good location for a retail operation, he said. Swire is considering taking out yuan loans to finance the project.

John Swire & Sons (China) general manager Raymond Yuen, who is also a director of Cathay Pacific, said the airline was forging closer ties with the mainland's three largest airlines  to enable it to cash in on the country's rapid industrial growth.

Such an alliance would also help the regional airlines become more competitive with links in outbound traffic. Closer co-operation could take the form of code sharing and joint selling of air tickets, partnership in cargo operations and pilot training and other back-up services.

Mr Yuen said the huge demand in China's aviation industry had prompted the need for more co-operation with mainland companies.

'From now to the year 2006, China will need a total of 1,600 Boeings and Airbuses,' he said. 'On average, 4.5 pilots are needed for each plane. There will be a shortage of pilots by then.'

Training of air crew is underway for some new routes, such as Chicago-North Pole-Shanghai.

But Mr Yuen said a greater effort was needed to bridge the gap.

Mr Hughes-Hallet said the company did not have any projects in western China, but he was amazed by the country's rapid economic development.

'The speed of change in China is very fast, faster than people have expected,' he said.

Mr Hughes-Hallet said the company would reach agreements soon in northwestern Xinjiang and southwestern Chongqing on cold storage facilities to extend its distribution and logistics operations.



Swire brings Pacific Place to Guangzhou in $4b deal