HONG KONG AIR POLLUTION DETERRING EXPATS, SAYS

UNCLAS HONG KONG 002313 SIPDIS SENSITIVE SIPDIS STATE FOR EAP/CM AND OES/E E.O. 12958: N/A TAGS: SENV ENRG PGOV HK SUBJECT: HONG KONG AIR POLLUTION DETERRING EXPATS, SAYS AMCHAM SURVEY ¶1. (U) Air pollution increasingly is harming Hong Kong's attractiveness as a posting for expat executives, according to the American Chamber of Commerce in Hong Kong's second annual environment survey. Fifty-one percent of respondents claimed difficulty in recruiting professionals to work in the city, as a result. The survey, to be released on September 10, shows marine water quality and traffic congestion ranking second and third as top influencing factors, with concern about traffic congestion increasing from 49 to 60 percentage points in just one year. Overall, 81 percent of respondents are not/not confident that the natural environment of Hong Kong will improve in the next twelve months. Reduction of transport emissions and gaining mainland China cooperation are cited as the most important actions that the Hong Kong government could take to change that outcome. AmCham President Jack Maisano said, "It's not that the Hong Kong government has been standing still, it's that international executives do not see a bold and clearly articulated prescription for progress." ¶2. (U) The survey focused on two areas, the quality of Hong Kong's environment, and potential Hong Kong government solutions. The survey respondents indicated the following: -Hong Kong's attractiveness to foreign investors is expected to drop in the future (78 percent agreed). -Companies will invest elsewhere (57 percent agreed). -More foreign professionals are thinking of leaving Hong Kong, 83 percent vs. 78 percent in the 2006 survey. -They personally know foreign professionals who have declined employment in Hong Kong due to the environmental quality (70 percent in 2007, an increase of 15 percntage points since 2006). Suggested governmentsolutions, in rank order, include: -Reduce polltion by transport (reduce emissions and the numbr of vehicles); -Work with local Chinese governmnts to cleanup mainland China; -Educate the pulic and Hong Kong companies who own factories in ainland China; and -Impose laws/taxes/penalties. ¶3. (U) The Survey: The 2007 Environment Survey was administered by The Nielsen Company, and sent to 628 AmCham member companies. The survey had a rather low response rate of 14 percent (89 responents),and a margin of error of plus/minus 5.3 percent. This is the second annual survey, initiated to measure AmCham member views on environmental quality and competitiveness. Survey details and graphics can be found at: www.amcham.org.hk. ¶4. (SBU) Comment: The survey provides tangible data to support anecdotal evidence that the expatriate community in Hong Kong views environmental issues seriously, and is making financial and personal decisions with these issues in mind. Additionally, the survey is generating broad media attention. A senior environmental protection officer said that the Hong Kong government, including the Chief Executive, had noted the survey and that they would continue to work on solutions. ¶5. (SBU) Comment, continued: Unquestionably worsening air pollution in Hong Kong is becoming an important political and economic issue, and the AmCham survey has usefully tried to quantify this fact. That said, the relatively low response rate weakens the impact of the data represented. Furthermore, the Hong Kong government reports a growing number of overseas companies registering in Hong Kong, reflecting Hong Kong's importance as a regional business center, with total foreign registrations growing by at least 200 companies for each of the last five years. End comment. Cunningham