Ms. Fong (left) and Ms. Chen (right) visited Atlanta Feb. 29. Photo by Trevor Williams.

All the diplomatic noise about Georgia’s bids for heightened trade with mainland China is music to Hong Kong’s ears, the city’s top economic representative in the U.S. told GlobalAtlanta.

More trade with Greater China, including Hong Kong and Taiwan, will boost Asia’s profile and benefit Hong Kong as a logistical and financial hub for the region, said Margaret Fong, commissioner in the Hong Kong government’s Washington trade office.

Along with Monica Chen, director of Hong Kong’s trade office in New York, Ms. Fong visited Atlanta Feb. 29 for an annual Chinese New Year celebration and event at High Museum of Art.  She also met with government and business leaders in the Georgia capital.

Georgia’s relationship with China has undergone some promising changes over the past year as the state continues positioning itself to capitalize on business with the world’s most populous nation.

Three Chinese companies are setting up manufacturing operations in the state, and Delta Air Lines Inc.’s nonstop flight from Atlanta to Shanghai to start this month has engendered optimism about future business relationships.

Hong Kong, still a separate customs district from the mainland with its own membership in the World Trade Organization, sees China's ascension as a boon rather than challenge.

Since 1997, when the U.K. returned Hong Kong to Chinese control, 55 percent more companies have set up regional headquarters in Hong Kong, a statistic Ms. Fong attributes to China’s breakneck development.

“What is happening in China is that it is growing so rapidly that everybody around the world knows that they have to be in China, so even before 1997 … we have always played the gateway role,” Ms. Fong said.

Georgia’s 2007 exports to seven territories in Asia, including Australia, mainland China, Hong Kong, Japan, Korea, Singapore and Taiwan declined 13 percent from 2006.

That number could’ve fallen harder without a 10.8 percent increase in exports to the mainland, now Georgia’s second-largest export destination.

Eugene Hanratty, the Atlanta-based president of the National U.S. Hong Kong Business Association, said Georgia’s relationship with Hong Kong is flourishing.  Officials throughout the state know the importance of Hong Kong’s American-friendly infrastructure and system to those who would undertake business in mainland China, he added.

Also, because it will “open up China,” Delta’s Shanghai flight will benefit Hong Kong, more a nerve center than an export destination in its own right, he added.

“I think the engine that really drives China is the Pearl River Delta, and that’s Hong Kong … There are a lot of businessmen in Hong Kong that have invested heavily in Shanghai, and a lot of that money will come back to Hong Kong.”

As of June 2007, 6,440 overseas companies have offices in Hong Kong, while 3,890 have set up regional headquarters there, Ms. Fong said.

Multinationals have long been a fixture in the bustling, cosmopolitan city of nearly 7 million people, but more small- and medium-sized companies have begun to use it as an entrée into China, she added.

A free trade agreement called the Closer Economic Partnership Agreement, or CEPA, signed in 2003, helps facilitate this process for companies of all sizes by removing all tariffs on goods exported to the mainland from Hong Kong.

Ms. Fong cited Atlanta-based Coca-Cola Co. as a local company that has taken advantage.

“By expanding their operation in Hong Kong and then exporting into mainland China, they actually can just immediately forget about the 20 percent tariff, so they’ve done pretty well under CEPA,” Ms. Fong said.

CEPA also covers 28 service sectors, and Hong Kong companies can wholly own their own freight enterprises within China, a significant advantage for exporters.

This low-barrier environment for logisitics has far-reaching implications for Georgia, where the Port of Savannah and Hartsfield-Jackson Atlanta International Airport are two main development engines, Ms. Fong said.

Jeff Pearse, director of marketing and business development at Hartsfield, told GlobalAtlanta that Hong Kong’s airport processes the most air cargo of any hub in the world.

Mr. Pearse, who worked in aviation in Hong Kong for five years, said that airport handles about 3 million metric tons of cargo per year.  Atlanta, which ranks somewhere around No. 10 in North America, handles less than a million.

Although there are no nonstop cargo routes yet between Atlanta and Hong Kong, Cathay Pacific runs a dedicated freighter to Atlanta by way of Anchorage, Alaska, and Dallas.

Currently the majority of Hartsfield’s revenue comes through passenger flights, but the airport wants to be ahead of the curve in providing adequate cargo infrastructure to sustain future growth in the Southeast, Mr. Pearse said.  

“When we wear the hat as the instrument for economic development in the region, cargo is important,” said Mr. Pearse.  Last year, Hartsfield for the first time processed more international than domestic cargo.

Delta’s flight to Shanghai will carry cargo loaded after passenger luggage, but the main promise for the flight with regard to Hong Kong is the increased connectivity for passengers traveling to Hong Kong as their final destination.

About 15 flights go from Shanghai to Hong Kong daily, and the Shanghai connection would be more direct than Tokyo or other traditional transfer points on flights coming from the U.S. East Coast, Mr. Pearse said.

Also, the delivery of the first Boeing 777 200LR long-range aircraft to Delta last month raises the possibility of a future direct connection.

“Delta’s got seven more (777s) coming in the next 13 months.  Places like Hong Kong become a reality to Delta with aircraft like that in their pocket,” Mr. Pearse said, although that would probably occur under a future “open skies” agreement between the U.S. and China, a pact the airport would like to see in place.

Ms. Fong said she discussed air cargo issues at a meeting with Atlanta Mayor Shirley Franklin during Ms. Fong's one-day visit to Atlanta.

The U.S. is Hong Kong’s second-largest trading partner.  With offices in New York, San Francisco and Washington, the U.S. is the only country with more than Hong Kong economic office.