The dismantling of the quota system and barriers to foreign investors, as well as reduced import duties, will create a flood of international trade and cargo flowing in and out of China, they said.

Hong Kong will be at the crossroads of this growth as many overseas companies looking to do business with the Mainland and even set up an Asian headquarters will view the SAR as their best option, they said.

The speakers, International Trade Consultant Leora Blumberg, Wing Han Trading Co. Ltd. Director H Y Hung, and Jardine Logistic Services (HK) Ltd. Group Vice President Robert Wong, said they believed Hong Kong's traditional role as a trading hub between China and the rest of the world would not be undermined.

China's trade volume is expected to grow to US$600 billion by 2005, up from US$376 billion in 2000, and Hong Kong would continue to serve as the conduit for international and domestic companies doing business inside or outside China, Mr Wong said.

Multinational companies may have the resources and expertise to enter the Mainland market directly, Mr Hung noted, but many small- and medium-sized overseas companies with little or no experience in China would still need an experienced Hong Kong company leading the way.

The average tariff for industrial products in the Mainland will be reduced to 9.4 per cent, and agricultural products to 17.5 per cent, by 2005. However, Ms Blumberg pointed out that this does not mean China's trade barriers will disappear totally. In fact, new hurdles, such as anti-dumping barriers, could be set in place to protect industries facing competition from imports. Many developing countries use the anti-dumping measures vigorously and frequently to protect their indigenous industries, and China -- which was often on the receiving end of the measure -- can now do likewise.

The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) announced it will establish an instant-react anti-dumping alert system. It will also make full use of negotiation channels to fight against unreasonable restrictions imposed and accusations by some foreign countries are making dumping claims.

Under these circumstances, Ms Blumberg recommended Hong Kong exporters study anti-dumping rules, other import restrictions and export procedures in China to protect themselves and add value to their middleman role.

For Hong Kong to become a trading and distribution hub, traditional concepts can no longer satisfy global logistics challenges. Hong Kong companies need to reposition themselves, sharpen their focus, provide value-added services and equipped themselves with the latest business tools and know-how if they are to compete in the new global trading environment, they said.