Three Links - Impact - Transit Points

Transit Points

The enforcement of the ban on direct trade links has benefited third party transit points, in particular Hong Kong, since 1988. Current China-Taiwan traffic channels about 60% of its traffic via Hong Kong, 30% via Macau, and the rest via other points such as Jeju. In 1997, the Taipei-Hong Kong air route alone constituted one-sixth of the passengers handled at the Hong Kong Airport with five million passengers, and by 2001, this figure has jumped to 6.7 million. In the fiscal year 2006-07, the Taipei-Hong Kong air route accounted for 18% of Hong Kong's 45 million passengers, making it one of the busiest international air routes by passenger numbers in the world.

1.6 million air travellers flew into China from Hong Kong in 1996, and in 2000, 18% of Hong Kong's 2.4 million tourists came from Taiwan, out of which 36% of them traveled on to China with or without staying in Hong Kong. In the five year period from 2003 to 2007 there were an average of 3.68 million passengers annually who travel through Hong Kong between the two locations. Today, about 60% of Taiwan-Hong Kong traffic connects onwards to flights into the Chinese, and for the Macau-Taiwan sector, about 80%.

Currently, over 3,000 flights offering nearly 1 million seats are operated every month by five airlines, namely China Airlines, Cathay Pacific, Dragonair, EVA Air and Thai Airways International, between Hong Kong and Taipei. In addition, flights are operated between Hong Kong and Kaohsiung by China Airlines, Dragonair and Mandarin Airlines, and between Hong Kong and Taichung by Dragonair, Hong Kong Express Airways, Mandarin Airlines and Uni Air. Summary of flights through Hong Kong and Macau are as follows:

Conversely, liberation of the three links may have adverse economic consequences on Hong Kong. The Hong Kong Airport Authority's chairman Victor Fung Kwok-king estimated up to 6% reduction in air travel through Hong Kong as a result of direct China-Taiwan flights. The city's tourism operators estimated losses of over HK$3 billion annually should the three links be liberated in 2008. A possible 6.6% reduction in tourism in Hong Kong may be limited in economic impact as transit passengers typically spend far less during transit, but it may have significant impact on Hong Kong-based airlines, in particular Cathay Pacific and its affiliate Dragonair. It was reported on 18 May 2008 that Taiwan's China Airlines intents to trim its Taiwan-Hong Kong flights by two to three flights per day once direct flights resume in July 2008, but the airline denied this, saying "when cross-strait relations improve and market trends are clearer, then we'll make a specific plan". Chinese Premier Wen Jiabao believes Hong Kong will not be affected as the increased economic exchange may benefit the city too. In the immediate aftermath of the announcements for 4 July direct flights, shares of Cathay Pacific fell by 1.8% over fears of its negative impact on the airline, which derives significant profits from the route. Shares of Xiamen Gaoqi International Airport and Shanghai Airlines gained 1.18% and 1.27% respectively over expectations of possible gains from the deal.