Las Vegans wait to see if Hong Kong will change

Wednesday, May 28, 1997 | 10:48 a.m.

It'll be about 3 in the afternoon on June 30 in Las Vegas when the economic shot heard around the world will reverberate from Hong Kong.

That's when British colonial rule ends in Hong Kong -- just after midnight on July 1 -- and Chinese sovereignty begins.

While the impact isn't expected to be great on Southern Nevada's growing Asian community, many local residents will be carefully watching what happens next.

The changeover has generated interest worldwide as sociologists, economists and political scientists analyze the impact Chinese rule will have on what many consider to be the greatest economy in the world.

"There really isn't going to be much of a dramatic change for us here in Las Vegas in terms of trade and export linkages," said Peter Cunningham, director of international trade for Nevada's Commission on Economic Development.

Cunningham, who has participated in familiarization trips to the region, bases his opinion on the current ranking Hong Kong holds as an export partner and the small percentage of funding the state dedicates to trade missions.

Cunningham said Hong Kong is the 10th leading export market for Nevada, increasing from a $10 million market in 1994 to $13.6 million in 1996. Nevada companies in 1996 exported $4.2 million in rubber products, $2.3 million in medical instruments, $1.69 million in chemicals and $183,000 in electronics. He added that while the state spends $120 million annually marketing tourism, it spends about $100,000 on trade missions.

Another local resident who will be keeping his eyes on Hong Kong during the transition is William Cassell, associate vice president for international studies at the Community College of Southern Nevada.

Cassell, who is recruiting foreign students to study tourism and hospitality in Southern Nevada after moving here in September from Santa Monica, Calif., says he has spent more time in Hong Kong than in downtown Las Vegas.

He said he hasn't detected any fear in what he calls "the city of the 21st century," but that most of the changes that will occur will be in the educational domain, not the economic.

"From the business standpoint, it's going to be great," said Cassell, noting that real estate continues to be a hot commodity and the Hong Kong stock market has soared to new records in recent weeks.

Retail outlets seem to concur.

In last week's International Council of Shopping Centers convention in Las Vegas, the Hong Kong trade show display dominated a showcase of international developers seeking retailers to set up shop in a market that will become a gateway to about 10 million more people than the 6.3 million that already live in Hong Kong.

Having a foothold in Hong Kong means having access to the surrounding provinces as well as the more than 10 million visitors that consider the city to be the center of commerce for the entire Pacific Rim. Hong Kong is the most popular tourist destination in Asia, drawing visitors from Japan, Taiwan and Korea.

Paul Husband, marketing manager for Swire Properties, one of 10 builders that joined forces at the ICSC show as a group calling itself "Developers of Hong Kong," said the biggest concern he had at the show was not reassuring retailers over the uncertainty of economic and political stability but about educating customers about Hong Kong itself.

"Most people think it's somewhere near Japan," said Husband, whose mission for the week was explaining the potential of the affluent customer base.

Husband said retail outlets in Hong Kong already have four to five times the sales of their American counterparts, more than making up for lease costs that run about three times as much as a comparable U.S. center.

Developers of Hong Kong tout the youth and wealth of the city: The per capita income is at about $23,600 -- just under the U.S. average -- and 32 percent of the population is under 24 years old and has developed a fierce loyalty to brand names.

The population is well-read and is exposed to a variety of advertising every day. There are 60 daily newspapers and 675 periodicals serving Hong Kong.

A number of international retailers and restaurant chains already have discovered Hong Kong and are looking at the July changeover as a golden opportunity to grow even more. Husband said entertainment retailers like Warner Bros., Disney and Tower Records have joined clothiers Alfred Dunhill, Christian Dior, Hugo Boss, Gucci and Gianni Versace as leaders of the retail community in Hong Kong.

Hard Rock Cafe, Planet Hollywood, McDonald's and the numerous Pepsico outlets are among the eateries that have found their way onto the streets of Hong Kong.

Husband said the city's infrastructure, already acknowledged as one of the most spectacular in the world, will accommodate even more visitors to the area when current construction projects are completed. The new Chek Lap Kok airport will open next year and will be capable of serving 35 million passengers a year. A new 34-mile railway linking the new airport with several destinations throughout the territory is expected to add to the number of visitors to retail outlets.

The train, in fact, is a metaphor for change in Hong Kong, CCSN's Cassell said.

"The changeover train is coming through," said Cassell. "That's how they refer to it."

To learn more about the changeover, Cassell recently attended a conference sponsored by the Association of International Educators in Vancouver, British Columbia, where he met with Michael DeGolyer, director of the Hong Kong Transition Project at Hong Kong Baptist University.

As part of his study of the changeover, DeGolyer supervised a series of surveys gauging Hong Kong residents' outlook on the coming switch.

The most recent survey, conducted in March, showed 62 percent of those questioned were either optimistic or very optimistic about Hong Kong's reunion with China and only 6 percent were pessimistic, with the 30 percent of the remaining answering "neither" and 2 percent refusing to answer.

Those surveyed made it clear that they are more optimistic about the changeover with respect to economics than politics and most believe Hong Kong is like a golden goose China wouldn't consider killing.

After all, many of the economic benefits China will generate through Hong Kong will be used to further education in China. Hong Kong's educational curriculum will incorporate more Chinese history and less on Britain as a result of the changeover, Cassell said.

"Most people in Hong Kong aren't worried about who's driving," said Cassell. "They're worried about the engine itself. There are boxes over certain parts of the engine that shouldn't be touched. A bad mechanic could screw up the works by touching it."