"Should the export orientation of western PRD increase to the existing level of eastern PRD over the next 10 years, total exports of the Greater PRD region will be able to increase by US$40bn," said Leung. The findings are contained in a TDC research report released in January.

In 2001, said the report, total exports of Guangzhou, eastern PRD (Dongguan, Huizhou and Shenzhen) and western PRD (Foshan, Jiangmen, Zhaoqing, Zhongshan and Zhuhai) were US$11.8bn, US$56.2bn and US$16.7bn respectively.

The PRD accounts for around 60% of Hong Kong's shipments. In air cargo, some 70% of the freight handled by Hong Kong is PRD-related. "Enhancing Hong Kong's logistics reach to western PRD may be able to bring an addition 30% and 35% increase in the total volume of Hong Kong's sea and air cargo throughput," said Leung. In 2002, Hong Kong handled a total of 19mn TEUs of sea cargo and 2.5mn metric tons of air cargo.

According to the report, western PRD in fact has a slightly bigger industrial output value than the east, and some of the cities have developed strong industrial clusters and expertise in certain manufacturing industries. However, most of the region's products are for domestic consumption. Foshan, for example, has the third highest industrial output value in the PRD, but only 31.5% of its output was exported in 2001.

"A major reason for the lower export orientation of western PRD is the weak logistics connection with Hong Kong compared to that of eastern PRD, particularly in road transport," said Leung. "Providing more direct and convenient links to Hong Kong will be vital to enhance the export capability of western PRD. "By completing the PRD loop in land transport, western PRD will be able to improve its connectivity to the international market and would definitely enhance its attractiveness as an export manufacturing base and a destination for foreign direct investment.

"A fully logistically integrated PRD will enhance the competitiveness of the whole region."

The report also suggests that smoothing the supply chain flow between Hong Kong and the PRD could be achieved by removing bottlenecks at the boundary. The report supports the construction of the Hong Kong/Shenzhen Western Corridor to increase road traffic flow between the two places. It also suggests hastening the setting up of juxtaposition of Customs control operations between checkpoints. Roads are the dominant mode of freight transportation between Shenzhen and Hong Kong. A total of 25,000 freight trucks now pass through the road crossing points each day.