Hong Kong to focus on boosting maritime services after leader Carrie Lam admits city cannot compete with rival ports on shipping
Hong Kong cannot compete with its shipping rivals and will turn its attention to maritime services as a way to strengthen its position as a key seaport trading centre, the city’s leader has admitted.
Acknowledging the decline in sea cargo passing through Hong Kong, Chief Executive Carrie Lam Cheng Yuet-ngor sought to address the weakness by boosting the sector elsewhere.
The government said it would focus on “high value-added maritime services” in areas such as ship leasing and insurance, and offer ongoing support to the city as a dispute resolution centre for the global industry. It would also inject HK$200 million (US$25.6 million) into the Maritime and Aviation Training Fund to boost talent in the respective sectors.
“Facing the fierce competition among neighbouring ports and ports in the region, we must admit that relying on our port container trade alone can no longer bring strong and sustained impetus for Hong Kong’s economic growth,” Lam said in her policy address on Wednesday.
“For this reason, we must capitalise on Hong Kong’s unique strengths and the immense opportunities brought by the ‘Belt and Road Initiative’ and the ‘Greater Bay Area’ development to develop high value-added maritime services.”
The rise of the Pearl River Delta cities of Guangzhou and Shenzhen plus the focus on the region working closer together, including with Hong Kong, is forcing them all to work out how to collaborate.
Hong Kong is the world’s fifth-largest port in terms of total containers shipped, down from fourth in 2014. It lags Singapore and three mainland Chinese ports: Shanghai, Shenzhen and Ningbo-Zhoushan. Guangzhou is not far behind. Recent government data showed container traffic declined 3.7 per cent in the first six months of 2018.
“We acknowledge the reality … we all know the situation with our ports and that we will need to have a division of labour with the Greater Bay Area,” a government source said.
“That is why we want to focus on maritime services.”
To encourage ship leasing businesses to stay, or even return to Hong Kong, the government agreed with the directions of a study conducted earlier this year to provide tax relief, though few details were offered. Another study has been commissioned to devise details and will be completed around the middle of next year.
The hint of tax relief would boost the ship leasing trade, a stimulus industry stakeholders had called for in May.
Meanwhile, marine insurers are expected to gain from a 50 per cent cut in profits tax, from 16.5 per cent to 8.25 per cent, with the legislative process for that starting in the next year.
To meet the needs of Hong Kong shipowners stationed overseas, the Marine Department has pledged to station staff at six overseas Economic and Trade Offices to provide help starting in 2020. The offices are in Shanghai, Singapore, San Francisco, Tokyo, Sydney and London.
Willy Lin Sun-mo, chairman of the Hong Kong Shippers’ Council, which represents the interest of exporters, importers and traders including the maritime sector, said the industry “will be very happy” with the policy address measures.
“With all that we are doing, Hong Kong as a maritime centre mirroring what London is doing, I think will make Hong Kong an Asian hub for certain,” the veteran industrialist said. “I think we will give Singapore a run for its money.”
Hong Kong required more imported workers for manual labour, something the Transport and Housing Bureau’s Maritime and Aviation Training Fund would not help alleviate.
“All the manual labour and physical jobs are extremely important to Hong Kong to ensure we have a balance. We can have the top professionals but if you don’t have anyone below that, it is politically sensitive. Otherwise the whole maritime sector cannot grow,” Lin said, highlighting the struggles of employing skilled labour as Hong Kong enjoys full employment.
A government report in 2017 said the port and maritime industry contributes 1.3 per cent (HK$29 billion) of Hong Kong’s GDP and employs 88,000 people, or 2.3 per cent of the total workforce.
Source: South China Morning Post