1. Introduction
There has been a growing interest in the air-cargo industry in Hong Kong for the last several years. In his
1999 Policy Address, the Hong Kong Special Administrative
Region (SAR) Chief Executive C.H. Tung stated that To this end, we will implement a liberal policy for air cargo services so as to further develop Hong Kong into an international and regional air cargo hub.
This, in turn, will create more jobs in the supporting service industries. A number of leading international air cargo carriers has expressed interest in expanding their operations in Hong Kong (Tung, 1999).
Thus, the interests arise in part due to the job-creation effect of the air-cargo sector. They arise also due to the fact that after the 1997 Asian financial crisis and given
China’s entry into the World Trade Organization
(WTO), Hong Kong faces the challenge of a structural transformation of its economy. Air transport plays an important role in Hong Kong’s overall economy.
Hong Kong’s export of air transport services itself amounted to HK$34 billion in 1997, or 11.5% of all services exports. As of March 1999, it had 121 establishments and directly employed 24,098 people. It contributes directly to Hong Kong’s external trade. By air, Hong Kong imported HK$366 billion and exported
HK$298 billion of merchandise in 1999. Although air cargo accounted for only 1% by weight of all cargo handled by Hong Kong in 2000, its value share was much higher at more than 23%. Obviously, aviation is also vital to the travel and tourism industry, which amounted to over HK$72 billion in gross business receipts in 1998 and contributed 5% to GDP.
Given its excellent geo-political location, Hong Kong has in recent decades become a key hub for international aviation—for passengers and for air cargo. Its airport handled 2.23 million tons of cargo (Table 1) and
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