In China's Pearl River Delta, HSBC faces a risky voyage

Sun Jun 14, 2015 3:24am EDT
 
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By Clare Jim and Lawrence White

DONGGUAN, China/HONG KONG (Reuters) - Every day hundreds of garment traders alight at the newly-built Humen station to ply their wares in the southern Chinese city of Dongguan, arriving on high speed trains that whoosh through the terminal every ten minutes.

The station, 90 kilometers north of Hong Kong, is on the first open section of a super fast rail network in China's Pearl River Delta that HSBC (HSBA.L: Quote) is betting will turn the prosperous region of 40,000 square kilometers into a seamless metropolis that can fuel the bank's growth in the next decade.

A visit to the area though shows up how infrastructure construction that HSBC is hoping will drive the region's development is moving at a patchy pace, underlining risks the lender faces in its Asia "pivot" strategy.

Roads leading to the huge, gleaming building of Humen station are permanently congested and not properly built, local residents say.

"The government's been constructing the road for over two years but it's still muddy and full of bumps and holes," a factory owner in the nearby town of Daojiao said.

A local taxi driver named Xu complained there are only 200 parking spaces outside the rail station, making access difficult.

"The government had expected the high speed railway to bring more people, but they didn't use their brain to plan carefully," he said.

Other, more fundamental, pieces of construction for the region are behind schedule.   Continued...

 
Workers walk in front of an unfinished factory building in the southern Chinese city of Dongguan, in this September 6, 2012 file photo. The newly-built Humen station in Dongguan is on the first open section of a super fast rail network in China's Pearl River Delta that HSBC is betting will turn the prosperous region of 40,000 square kilometres into a seamless metropolis that can fuel the bank's growth in the next decade.    REUTERS/Tyrone Siu/Files