HK airport in talks to buy Shenzhen stake

By Joanne Chiu

HONG KONG (Reuters) - Airport Authority Hong Kong is in talks to buy a stake in Bao'an Airport in the southern Chinese city of Shenzhen, the authority's top executive said on Monday.

He added that Hangzhou Xiaoshan International Airport, which is 35 percent owned by the authority, is considering a stock market listing, preferably in Hong Kong, to fund expansion.

The authority, a statutory body wholly owned by the Government of Hong Kong, has been talking with Shenzhen for more than five years on hopes of gaining a foothold in the mainland's aviation network through an investment in the airport, Chairman Victor Fung told Reuters in an interview.

Hong Kong is seeking cooperation with the mainland amid competition from southern China as it struggles to remain the Asia-Pacific hub for both cargo and passenger traffic.

This is the right time to talk about equity investment, Fung said, since Hong Kong Chief Executive Donald Tsang proposed in his policy speech in October studying construction of a railway to link the airports in Shenzhen and Hong Kong.

Fung also said Hangzhou Xiaoshan airport was studying a listing to fund expansion and to tap into rapid growth in travel in eastern China.

"Of course I would support the listing of Hangzhou Xiaoshan Airport in Hong Kong," he said.

He declined to give further details of the listing.