For people who live here, for the city of Hong Kong itself, for its enterprises, for its watch professionals, absolutely no one could have imagined a worse scenario. Hong Kong became the unwitting star of a bad remake of the Hollywood film, 'Outbreak' in which Dustin Hoffmann battles a mysterious disease.

The Severe Acute Respiratory Syndrome (SARS) crept into Hong Kong from the neighbouring Chinese province of Guangdong, resulting in a horrible nightmare that the people of this city certainly did not deserve. It is a nightmare that forces them to take meticulous, repetitive and obsessive precautions to avoid the contagion of the mysterious corona virus, for which there is no cure and no vaccine.

Despite the media attention, if we examine the actual numbers of SARS victims, there is no need for panic on an epidemiological level. There have been some 210 deaths and around 1000 people contaminated out of a population of 7 million inhabitants. To put things in perspective, health authorities in Hong Kong were forced to admit that the ordinary type of pneumonia kills an average of 1000 people in Hong Kong every month during the spring season, the period most conducive to the development of this serious illness.

So, why then is there such panic in relation to SARS? Is it simply the fault of an overzealous media? No, not really. It has been principally the medical corps, frightened by the number of their own who have been stricken with the malady, who have sounded the alarm. In hospitals, doctors and nurses who care for SARS victims are finding themselves brutally contaminated as well. As a result the already overcrowded hospitals are in total disarray.

The doctors began to shout even louder because, on the other side of the border at Shenzhen in the Guangdong province where everything began, the health authorities remained tight-lipped, erecting a wall of silence around the entire affair. The resulting damage was considerable on all sides.

Beyond the obvious economic consequences of SARS, the most devastating effects can be seen in the minds and spirits, as evidenced by the appalling misadventure at the BaselWorld Fair where 383 exhibitors from Hong Kong, Singapore, China and Vietnam were banned by the Swiss federal authorities from working at their stands.

“We were told there could be no commercial activity at our pavilion before the implementation of the measures decreed by the Swiss Authorities, which would take two nights and two days,” stated Frederick Lam, Hong Kong Trade and Development Council (HKTDC) Deputy Executive Director at the time. “If cleared, the very earliest we would be allowed to start business would be Sunday, nearly half way through the fair. But it would probably be even later.”

“The consensus of the Hong Kong exhibitors and the HKTDC is that this was totally unacceptable and left us no option but to withdraw. We will proceed with legal action and sue for damages,” Lam continued.

While recognizing Swiss concerns, the HKTDC argued that the terms of the decree were 'sweeping and unreasonable' and came too late. Hong Kong had offered to go beyond World Health Organisation guidelines and exhibitors were willing to be tested. The Secretary of Commerce, Industry and Technology, Henry Tang, personally intervened with the federal Swiss Government's Trade Minister, Joseph Deiss. Leaders of Hong Kong's jewellery and watch industries threw their full support behind the HKTDC's efforts in Switzerland to find a solution. The four major industry and commerce associations – the Chinese General Chamber of Commerce, the Federation of Hong Kong Industries, the Chinese Manufacturers' Association of Hong Kong and the Hong Kong General Chamber of Commerce – sent a joint letter to the Swiss Consul-General protesting the decision and pressing for a resolution.

Hong Kong has been participating in the Basel Fair for the past 18 years and is the second largest national delegation, with 317 exhibitors. Only Switzerland has a larger representation. Between 2,500 and 3,000 people from Hong Kong were affected by this ban.

In Hong Kong, trade specialists and commentators accuse Bern of having used SARS as a pretext for eliminating competition that has increasingly become a threat to the Swiss watch industry. How, they ask, could the Swiss authorities ban exhibitors on the pretext that they might have the disease, and yet permit thousands of other 'potentially dangerous' visitors from Asia to come to Basel as buyers with absolutely no restrictions?

“SARS was used by the Swiss government at BaselWorld in the same way that Washington advanced its argument for weapons of mass destruction in Iraq,” declared a Hong Kong industrialist. “It was all window dressing,” he added. “In the case of Iraq, the United States wanted to get its hands on the country's oil resources at any price, while at Basel, the Swiss Government wanted to get rid of us because everyone knows that the Swiss economy is not in such good shape.” True or false (we won't try to determinate it here), the similarity between the two events, which have nothing in common other than the fact that they occurred at the same time, is nonetheless intriguing.

In any case, the watch industry in Hong Kong, whose eviction from BaselWorld cost them an estimated 10 billion Hong Kong dollars (US$ 1.28 billion) in lost sales, certainly did not need that. Edward Leung, Chief Economist at the HKTDC, declares, “The spectre of SARS has obviously affected Hong Kong exports. The fear of this epidemic reached heightened proportions at the same time that the USA-Iraq war ended, which reduced the geo-political uncertainty weighing on the world economy.” After the mishandling of the BaselWorld affair, mistrust has developed between Hong Kong and Bern, in much the same manner that it has developed between Washington and the 'old Europe' nations during the Iraq crisis. This is not a good situation for any of those concerned.

Hong Kong now wants to re-attract tourists from all over the world. With a heavy dose of bleach and constant cleaning, it seems that rehabilitation is well underway. But Switzerland must make amends for the harm done (for unspoken reasons) to those professionals of good faith who made their annual pilgrimage to Basel, and who now have serious doubts about their partners.

Already the Federation of Hong Kong Watch Trades & Industries Ltd and six other jewellery associations have sent out a questionnaire to their members following a meeting at the HKTDC's headquarters. The associations asked quite simply if their members would like to participate in BaselWorld in 2004, or if they would prefer to take part in a Hong Kong organized exhibition not far from Basel and at the same time, perhaps in France, Germany or Italy.

The announcement in 2002 of dividing the Basel Fair into two locations and exiling the national pavilions to Zurich had already been met with anger and was only accepted after hard negotiations with the Hong Kong exhibitors. Now, this initiative has turned into a boomerang that has come back to hit the Basel Fair organizers squarely between the eyes following the fiasco resulting from Bern's decision. “After all,” people in Hong Kong are saying, “since they had already decided to make us leave Basel, why not go see what it is like on the other side of the border?”

We know that BaselWorld lost nearly a quarter of its visitors in comparison to last year. Official Fair estimates put the number of visitors at 64,350, down 22% from 2002. We can certainly better understand the threat to the Fair if the Hong Kong delegations decide to create a parallel exhibition.

In the meantime, as in the divorce of a couple, both sides will now sit before a judge to explain their demands and actions. The Hong Kong Trade Development Council has hired the law firm of Herbert Smith to sue the Swiss Government for having banned the Hong Kong companies from selling their wares at BaselWorld 2003. Since no one knows how long this will take, the HKTDC has offered each Hong Kong exhibitor an advance of 30% of its participation fee, up to a ceiling of 20,000 Hong Kong dollars (US$ 2,567). Well, it is one way to try and calm down some very angry people.


Interview with Kevin Lau, Managing Director of Hanville Company Limited, Hong Kong