MOTORING / Wild car chase on the China Sea: In Hong Kong cars are stolen to order and smuggled by boat into China. Jeremy Hart joins the police pursuit

TO BE upwardly mobile, first you have to be mobile. For entrepreneurs in China, as elsewhere, mobility means the best in four-wheel transport money can buy. Mercedes 600 SELs are the current top status symbols on the streets of Beijing, Shanghai and the economic powerhouse of Guangzhou.

China's economy is expanding like no other in the Asian boom market. Car ownership, estimated at 224 Chinese per vehicle (compared with seven for Singapore), is enjoying a growth rate of 10 per cent. On the streets of China mobile phones and European designer suits are as visible as in Hong Kong or Taipei, but now the entrepreneurs of the People's Republic want wheels - and they want the best.

Passing through the port of Guangzhou every week in sealed containers are some of the world's most expensive cars. But the legal cargoes are barely appetisers when it comes to satisfying China's hunger for Western limos.

Stolen from outside hotels or from underground car parks in Hong Kong, the cars come into China in high-speed powerboats, or are dragged under the waters of the South China Sea in giant Neoprene bags. Some 1,025 Mercedes, worth more than pounds 20m, were stolen from the streets of Hong Kong last year - three a day. Almost all of them ended up in China. Each car, mainly the 600 series, is stolen to order, right down to the colour.

Professional thieves, paid no more than pounds 200 a time and working as a team, break into target cars all over the city, quickly passing them down a chain that leads to a deserted wharf near the Chinese border. There, the cars are lowered into hollowed-out speedboats (tai feis) for a 30-minute run to China. If the crew members of the tai fei (literally, 'big flyer') are successful, they can earn up to pounds 10,000 each on a racket fuelled by the avoidance of China's 250 per cent import tax.

From start to finish, Hong Kong to China, the whole process takes no more than an hour. Many owners are still supping at a classy restaurant when their cars touch Chinese soil, out of reach of the short arm of the Hong Kong law. All the smugglers have to do is break the British line of defence.

'The operations are very slick,' said Jim Mather, an inspector with the Royal Hong Kong Police Anti-Smuggling Task Force. A former bomb-disposal officer, Mather is the last hope for Hong Kong's well-heeled. If the 60mph tai feis get past his hi-tech line of defence, the owners can forget their cars. Very few are ever recovered.

Every night, on the inky inlets that litter Hong Kong's islands, Mather leads a team of commandos on anti-smuggling operations. For years, the police had nothing faster than a lumbering 25-knot launch. Now they are on an equal footing with the smugglers. They have turned captured tai feis into patrol boats. The crews bristle with arms: revolvers at their waists, MP5 machine guns and CS gas guns slung over their shoulders, bullet-proof vests.

'The first time the smugglers saw us coming in one of their boats, they got a real surprise,' Inspector Mather said. 'Now it is down to skill. If we are as fast or faster than them, we have an 80 per cent chance of catching them.'

But Mather has caught only one of the boats with a car on board. 'We were within 20 minutes of China. He was carrying a Mercedes. We couldn't have chased him for much longer.'

In two of the squad's five captured tai feis, we skulked out of the police dock close to one of the prime areas for car crime. Neon lights from a quayside hoarding threw a red glow across the harbour. It was nine o'clock, opening time for car smugglers.

On cliffs around the colony, police spotters practically rubbed shoulders with the smugglers' lookouts, ready to alert each other. Cutting a trench 3ft deep in the South China Sea, we swept past the end of the runway at Kai Tak Airport. A Cathay Pacific 747 lifted off above our heads, the only thing all night to drown out the roar of our five Mercury engines.

'If things get hot, get down,' warned Sammy, one of the Hong Kong police. The threat of shooting was real enough. 'In April we had to open fire because one of the smugglers was about to ram us,' Sammy said. High-speed aquabatics are the norm, the police and the smugglers dodging each other at 60mph in heavy seas. Since it was formed in 1991, two members of the squad have died in collisions.

Soon after 10pm, the radio crackled. A Royal Navy ship had spotted something near Lan Tao island. Jim gave Kelvin, our driver, directions. In a dark cove, a Chinese sampan wallowed just off the beach. Sammy examined it with the night-sight. No car smugglers, but we went in for a closer look. A Chinese man screwed up his eyes as Sammy turned on the searchlight. He was only gathering wood from the beach; flotsam and jetsam washed up after a recent typhoon. We resumed our patrol.

Another radio call sent Kelvin into a frenzy, flicking the boat around and off in another direction. For 10 minutes we raced about the channels that separate Hong Kong's islands. All we saw was a police launch. The navy had sent us off after one of the good guys. 'It happens,' Jim shrugged.

Jim, nicknamed Scrap Man because of his rusting MkIV Cortina, trained as a solicitor in Newcastle before flying to Hong Kong on a whim. 'I watched Hong Kong Beat as a kid and thought that looked exciting,' he said. 'When I came here it was my first time abroad. I joined the police and ended up boat-hooking corpses out of the sea. All part of training.'

Stories of 19 BMWs being shipped in one night, with convoys of tai feis shuttling backwards and forwards, keep the squad fired up. More often than not, only one or two will be smuggled on any night. An increased police presence is making smuggling more difficult. 'For years we had almost nothing to work with, we were completely outgunned,' said one senior officer.

The change came after a rash of car thefts became an epidemic. Influential businessmen complained directly to the governor. Even local politicians had their cars stolen. 'I was very careful with my car. I would never leave it on the street, and at night I would take a taxi,' said Peter Wong, a politician who lost his new Lexus. 'But it still went.'

The squad claims to have beaten all but the most resilient of smugglers. So far this year the number of sightings of tai feis has dropped from 3,885 to 1,619. Soon, even the most determined of smugglers will have little to do: 180,000 cars will be made in China this year under joint ventures with Volkswagen, Audi, Peugeot, Jeep and Daihatsu. Citroen is building a plant near Guangzhou for the production of their ZX saloon, to be called, somewhat dubiously, the Fu Kang. If, and when, the luxury-car makers start production in China, it will put the smugglers out of business. And post-1997, who knows what will happen?

Until then, the risks for smugglers are still relatively low. 'If you smuggled every day for a year, you might only get caught once,' said Jim Mather, who has a series of 'scores' - black silhouettes of tai feis - on his office door. 'There is still only a 1 per cent chance of catching the smugglers.'

For owners, the cost of smuggling has been enormous. Many insurance companies in Hong Kong refuse to cover luxury cars or charge as much as pounds 20,000 a year for cover. In China, where many of the stolen cars are driven by the police, insurance is insignificant.

If there were any smugglers out that night we didn't catch them, bad news for the owners of good cars. 'One man lost a 600 SEL and says it'll be the last Mercedes he owns,' said Stuart Whitmore, a luxury-car dealer in Hong Kong. His advice? 'The Chinese don't like Jaguars.' Until they do, it is the car to buy. -