What with the bursting of the biggest asset bubble in history, a synchronised global recession and devastating terrorist attacks last year, it would be hard to see how operating conditions could get much worse for Hong Kong's exporters. Unless of course you count the shutdown of the main point of entry to their biggest market. If the West Coast port strike drags on, it could prove disastrous for Hong Kong's economy and its export stocks. On average, during the first six months of this year - the slower half - 4,300 containers each day were shipped from Hong Kong to ports along the west coast and nearly 20 per cent of the SAR's exports head for the four main ones. Perhaps it was not surprising to see Morgan Stanley economist Andy Xie warning of a disaster at the end of last week. 'If this lasts for a month, we're going to see tonnes of damage,' Mr Xie said. Although locked in negotiations over the weekend - with hints from the White House that the Taft-Hartley Act could be invoked to force the ports to open and an 80-day 'cooling-off' period - some Asian manufacturers are already feeling the effects of the months-old dispute between the Pacific Maritime Association and the dock workers' union. Japanese manufacturers such as Nintendo have said that a prolonged dispute could harm the essential Christmas season, while some United States-based vehicle-makers have idled California plants in the absence of parts from Asia. In Hong Kong, analysts have gauged the reaction from the manufacturing sector and, so far, they do not see a major problem. 'The companies we have spoken to . . . view this as nothing more than a temporary bump on the road,' UBS Warburg analysts said. Similarly, SBI E2-Capital Securities analyst Raymond Jook surveyed 10 leading exporters to find that the strike would have only a 'moderate' impact of 1 per cent to 5 per cent on their earnings. But the market seems to have a problem with the strike, with many exporters sent tumbling last week as the dispute finally made it to the front of Asia's newspapers. Consumer electronics firm VTech Holdings, for example, dived 15.6 per cent last week against a 2.61 per cent fall in the Hang Seng Index. But many manufacturers on both sides of the Pacific have made contingency plans. For companies such as Li & Fung, Christmas came early this year, or at least, the orders did. 'This issue has been ongoing for six months - it only became obvious when the TV started reporting it,' said Anne Ling, an analyst with HSBC covering exporters such as Li & Fung and textile play Glorious Sun Enterprises. 'US retailers have been aware of this and have been doing some precautionary moves like asking some orders to be delivered earlier than normal.' Mr Jook estimated that some companies, including Li & Fung and Glorious Sun, have already shipped between 70 and 80 per cent of their Christmas orders. It is anticipated, on this side of the Pacific at least, that those goods which cannot get through direct to the west coast will either be flown, or shipped up the Panama Canal to the east coast, and then trucked across the US to the west coast. Although both options are significantly more expensive, analysts said local firms would not be directly affected as the goods were sent free on board, meaning that the customer was responsible for bearing the cost of shipping. UBS said shipments from consumer electronics play and Wal-Mart Stores supplier Ngai Lik Industrial Holdings were queued outside the West Coast ports, but the company did not need to worry about this because once their products were shipped to the Kwai Chung terminal, they had fulfilled their contract and were entitled to collect their money. That takes care of the present orders, but would a retailer in the US really be happy to shoulder the extra costs of shipping goods from Asia if the strike drags on? 'I'm sure that they will,' said Hong Kong Federation of Industry director-general Vicky Davies. 'If they want a long-term relationship, they'll have to work things out.' However, all said their present take on the effect of the strike was based on the assumption that it would be a short-term one. If it went on longer, analysts said, then the impact would be anyone's guess. 'If it's a prolonged strike, it affects everyone, but at the moment, no one knows what's happening,' said Kenny Lau, an analyst with CLSA. Even without the strike, many local manufacturers would be facing the prospect of a not so cheery Christmas as evidence mounts that the decade-long consumer spending binge in the US is coming to an end. 'We've been advising a 'sell' since April because we found that the market was expecting too much from them on the business recovery and their valuations were too high,' Mr Lau said. He found that the average price-earnings ratio for the exporters is 37 per cent above their five-year average. This was an excessive premium, he said, given expectations for a slower second half and generally dull prospects next year. For the moment, then, the strike is simply a large, but moderately costly, annoyance. Provided that the dock workers return to work soon, it will not be any more than an annoyance. Any longer, and it seems all bets are off. 'There will definitely be a chain reaction if things drag on,' Ms Ling said.