Business

Pollution threatens Hong Kong's competitiveness

Media playback is unsupported on your device
Media captionBusinesses say pollution is making it increasingly difficult to attract and retain talent in Hong Kong

A lorry drops off boxes labelled as leather shoes and glass bottles at the Kwai Chung container port in Hong Kong.

Within minutes, two men transfer the shipment onto a smaller vehicle.

The battered lorry soon disappears onto the highway, spewing a grey puff of smoke.

These ageing diesel-powered vehicles are being blamed for causing roadside pollution in Hong Kong and have become a big bone of contention between the government and the operators.

On Wednesday, Hong Kong's chief executive Leung Chun-ying announced a $1.3bn (£810m; 977m euros) subsidy programme to help phase out heavy polluting vehicles.

"The scheme will significantly reduce the overall emissions of (harmful) particulates and nitrogen oxides by 80% and 30% respectively," said Mr Leung.

He also proposed that newly registered diesel commercial vehicles must be taken off the road after 15 years in service.

Growing concerns

The move comes amid growing concerns about the impact of high pollution levels on health.

The independent group Civic Exchange estimates that smog is responsible for some 3,200 premature deaths per year in Hong Kong.

The biggest danger, it says, comes from roadside pollution caused by diesel vehicles.

Even Hong Kong's audit commission has criticised the government for failing to achieve its own air quality targets since 1987, despite years of clean-air measures.

Its October 2012 report found that grant schemes to replace ageing diesel commercial vehicles have had little success.

Today, about two in five of the 121,000 diesel commercial vehicles on Hong Kong's roads are considered high polluters.

However, Stanley Chaing, chairman of the Lok Ma Chau China-Hong Kong Freight Association, says it cannot accept the government's latest subsidy offer saying it is "too little".

He says that previous government subsidies to replace Euro II models or lower were not enough.

There are five pollution standards in the European Union, with Euro I emitting more pollutants and V releasing the least.

"New Euro V models are costly and most of our small business owners cannot afford to replace their diesel vehicles," says Mr Chaing.

He's hopeful that the government will offer to subsidise at least 30% of the cost of a new diesel commercial vehicle.

Business impact

And it is not just concerns over health that have the officials worried. The bad air quality is now starting to hurt businesses.

A 2012 survey by the local American Chamber of Commerce found that a third of respondents had difficulty recruiting overseas professionals because of Hong Kong's poor air quality.

"That's pretty serious," says the chamber's environment steering committee chairman, Evan Auyang.

The fear is that if firms are unable to hire the best talent and convince them to come and work in Hong Kong, they may be forced to shift their operations to other places in the region.

Christopher Hammerbeck, the head the British Chamber of Commerce, says that while companies that need to access the Chinese market may continue to be based in Hong Kong, other firms may be driven away.

"It is a question of competitiveness, because people obviously make comparisons with other cities around Asia, in particular Singapore," he says.

Losing talent?

To make matters worse, there are concerns that those already working in Hong Kong may also be forced out by bad air quality.

John Luciw's family moved to the suburban district of Discovery Bay, on Lantau island three year ago, in the belief that the air quality is better there.

On a clear day, the family can see Disneyland across the harbour. But it was hidden under smog last Friday afternoon.

Image caption There are fears over the impact of high pollution levels on the health of Hong Kong residents

That meant no playing in the park for Mr Luciw's three-year-old, Alexandre. It's the second day he had to stay indoors that week.

It's tough because toddlers are so active, says mother Connie Wong. But she says it is safer to stay home than go outside on such days.

Ms Wong herself had developed asthma as a teenager growing up in Hong Kong. Mr Luciw also started having allergies when he arrived from Canada.

They both believe that their health problems are related to pollution.

"I'd wake up in the morning, itchy eyes, watery eyes, runny nose, sneezing quite a bit and that would last for at least 20 to 30 minutes every morning," Mr Luciw says.

That all changed when the family installed air purifiers around the house.

"The effects were dramatic. All of my symptoms went away almost immediately," he says.

His allergies return if he stays outdoors too long on polluted days.

For now he has to stay in Hong Kong to help run the web portal AsiaXPAT. But his brother, who is a co-founder of the company, has already left.

He suffered from a nagging cough and moved to the resort island of Bali in Indonesia, overseeing the business from there.

"My brother left because of the pollution," says Mr Luciw, adding that given a chance, he would also like to do the same.

Hong Kong should be worried if more people start to think like him.

More on this story