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The former hot spot of production is weakening. Last week came the news that the world’s second largest optical component maker, Oclaro, has moved to Malaysia from its base in Shenzhen, the third of its kind to quit the south eastern Chinese city. In the first two months of this year, exports from Shenzhen fell 12.7% year-on-year.

It’s perhaps no wonder then that there has been little word from Jade or its proposed new investor, Uni-top. Or that Lufthansa is happy to quit the relationship.

Meanwhile, over the water, Hong Kong’s not looking much brighter either. In comes the news that Cathay Pacific is considering parking more aircraft, following its decision last week to put one of its 747 BCFs in the Californian desert while its new 747-8Fs come on stream. It has already deferred delivery of two 747-8Fs until 2013.

“Our cargo business still shows no sign of any sustained pick-up,” wrote CEO John Slosar in the airline’s magazine. In March, it reported a 61% drop in profit for 2011.

Rates in Hong Kong are said to have fallen by 10 to 15% this year in the first quarter, according to one source, (although he pointed out that last January was reasonably strong, distorting the figures slightly).

Things are far tougher in the region for foreign carriers, however. “You can’t survive in Hong Kong without decent rates. It’s two hours further on than Shanghai for the Europe routes, and that’s two hours’-worth more fuel,” revealed one source.

Much of the business in Hong Kong stems from contracts with forwarders rather than ad hoc work, which helps sustain rates. But, complain airlines, the larger multi-national forwarders are offering shippers low rates, hoping in turn to squeeze the carriers.

For foreign carriers, it’s still the big players that count in Hong Kong, while the domestic players maintain strong relations with local forwarders.

“It’s hard to get good relationships with forwarders locally,” said a source at one airline. “They are still hesitant, and like to trade and shop around. They tend to work with Chinese carriers. And discussions are all price driven at the moment, not product driven.”

The one bright part of the story this year so far was the charter activity and squeeze on capacity for the US launch of the iPad3. Apple’s other launch this year is expected to be in October, for the iphone5, and observers say that after a volatile  – and weak – spring and summer, they are expecting marginally better news in the third quarter.

But there could be better news a little sooner. Samsung will be releasing its much anticipated Galaxy S III, in June, which is also likely to create a small peak out of the region. While Apple’s products tend to steal the focus, Samsung overtook its Californian rival in worldwide smartphone sales in the third quarter of last year, with a market share of 23.8% compared with Apple’s 14.6%.

Despite these anticipated little peaks, yields could still be problematic. Transport costs in China rose 11.8% in the first two months of the year, while the growth rate for the total logistics industry fell 3.9 percentage points.

In the longer-term, if and when this miserable period for the industry finally ends, there remains confidence in Hong Kong, despite the shift in Chinese manufacturing towards the west and centre of the country. Hong Kong is still China’s top air freight destination by tonnage, although Shanghai continues to grow, (and, interestingly, is the top trade lane for Hong Kong). HACTL saw volumes fall 2.5% in the first quarter of this year. Which is not too bad, considering. The west might be growing, but the Pearl River Delta boom isn’t quite over yet.

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