Bad air taints Hong Kong's business reputation

HONG KONG, Sep 10: Andy Ridehalgh, a British expatriate who has worked as an English teacher for three years in Hong Kong, has had enough of the city's air pollution. He'll move with his wife and newborn son to southern France next year.

''I'm asthmatic and I use a lot more Ventolin when I'm here,'' he said, referring to his asthma medication.

''If you think about the effect it's having on me, think about the effect it's having on a small baby. It's not something we want permanently.'' Hong Kong's international business community, drawn for years by the city's low taxes and strong legal system, has become increasingly critical of the bad air tainting its business-friendly credentials.

''It's a major concern to the chamber and its members and their families,'' said Deborah Biber, the Chief Executive of the Australian Chamber of Commerce.

The British Chamber of Commerce called on Hong Kong's leader, Donald Tsang, to make the environment his top policy priority in the coming few years, saying the deteriorating environment was ''adversely affecting ... our enviable international status.''

BREATHING BAD AIR

While the economic costs of bad air have been difficult to quantify, the American Chamber of Commerce in Hong Kong found in a recent survey that four out of five business executives knew someone who was thinking of leaving or had left the territory because of the poor air.

Nearly 80 per cent of the 140 executives polled also found that Hong Kong's level of attractiveness to investors is decreasing because of the deteriorating air quality.

''People in services don't want to breathe bad air. An investment banker can work anywhere in the world, he doesn't have to work in Hong Kong. He can go to Singapore, London or New York,'' said Alan Seigrist, the head of the group's environment committee, which carried out the survey.

A Thai-American managing director of a large investment bank, who declined to be named because of the sensitivity of the issue with his firm, left Hong Kong in June -- for a second time -- because his 10-year-old son's asthma condition worsened substantially during Hong Kong's smoggy winters.

The executive went as far as seeking a ''gentleman's agreement'' with his employer before moving to Hong Kong, giving him the option of leaving should his son's asthma act up again.

''I reserved the right to repatriate myself,'' he said. And repatriate he did. The executive has moved to San Francisco where he says his son is in better health. ''If I had a sense that this would be a resolvable situation in a finite period of time, we probably would have considered more seriously staying. But at the moment, there's no obvious resolution of the pollution situation anytime soon,'' the executive said by telephone from California.

With few natural resources save its deep water harbour, Hong Kong can ill afford to lose top business talent to cities including Singapore that are also competing to be the Asian hub for global banks, money managers and other multinationals.

Government statistics for 2005 showed double-digit percentage declines in the number of British, Canadian and Australian expatriates who live in Hong Kong to around 51,000 individuals from 63,000. The government included pollution as a factor.

LONG TERM PROBLEM

Much of Hong Kong's air pollution comes from local coal-fired power stations, experts say, but a large amount is also blown across the border from the tens of thousands of Chinese factories in neighbouring Guangdong province, many of them Hong Kong-owned.

The Hong Kong and Guangdong governments have pledged to cut pollutants including sulphur dioxide by 40 per cent by 2010.

But with the mainland's electricity-hungry manufacturing boom showing no signs of abating, there are fears in the Hong Kong business community that air quality could deteriorate further.

''It is going to be 10 to 15 years before we really start to see the cleaner production in process across all of the factories, all of the power stations,'' said Andrew Thomson, head of the Business Environment Council, a leading green business body with members including major corporations and banks.

For the first six months of this year, Hong Kong suffered 65 days of smog reduced visibility of less than five kilometres, making it difficult at times to glimpse buildings across the harbour.

Its particulate levels are around 40 per cent higher than in Los Angeles, the most polluted city in the United States.

''Hong Kong is still an important business centre ... but from a business point of view it (the pollution) is a challenge,'' said the banking executive who left Hong Kong due to his son's asthma.

''Using me as an example, it is going to cost somebody, whether the firm or me personally or the business overall, the pollution is going to cost us,'' he added.

REUTERS