Private-sector banks, spooked by China’s ruthless suppression...

Private-sector banks, spooked by China’s ruthless suppression of a pro-democracy movement, are showing reluctance to finance Hong Kong’s ambitious plans for a second airport without government guarantees.

Hong Kong has come to rely on the private sector to develop most of the colony’s infrastructure, but since the early 1980s it has stopped guaranteeing the financing of such projects, leaving the risk to investors. But financial sources said bankers would be unwilling to accept such conditions in the case of a new airport. “The situation is completely different,” a European banker said.

Even if work on a new airport started next month, it would not be completed until after 1997, when China resumes sovereignty over Hong Kong. Government officials in recent weeks have been pushing the project to bankers as a key part of Hong Kong’s economic development and a major boost to investor confidence.