THB and HKMPB reaffirm support for port

HIT

The Transport and Housing Bureau and the Hong Kong Maritime and Port Board have confirmed their strong support for the current and future competitiveness of the Port of Hong Kong in the face of contradictory remarks by the head of another government department.

Recent statements made by Hong Kong’s secretary of constitutional and mainland affairs, Raymond Tam Chi-yuen regarding the development of the “Greater Bay Area” have prompted a rebuttal from the THB and the HKMPB.

Briefing the media before a high-powered delegation to Guangdong this week, which includes chief executive Leung Chin-ying, Mr Tam said that under plans for the economic integration of Hong Kong, Macau and nine cities in Guangdong province Hong Kong would keep its leading financial centre status but should no longer compete in the container terminal business. The statement is in stark contrast to the views frequently aired by the THB and, since its inception in 2016, the HKMPB.

Mr Tam’s comments are thought to be the first instance of a possible split in the Government’s attitude toward the role and future of Hong Kong’s port.

In a statement issued yesterday the THB did not seek to contradict Mr Tam’s statement outright but unambiguously supported the port’s future as a competitive force in the region.

“In view of the rapid development of ports in the region, Hong Kong, leveraging on its connectivity and frequency of liner services, has become an important transshipment hub and a regional distribution centre. The share of transshipment throughput rose from 33% in 2000 to about 60% in 2016.”

The THB added: “In April 2016, HKSAR Government established the Hong Kong Maritime and Port Board to champion and strengthen Hong Kong’s position as an international maritime centre, especially as a “super-connector” under China’s Belt and Road Initiative.

“Riding on Hong Kong’s vibrant port and established shipping heritage, we aim to further consolidate into a major maritime services hub through effective policies and practices for the maritime cluster, with good synergy with shipping and port operations.

“Speaking also as chairman of HKMPB, the secretary for Transport and Housing Professor Anthony Cheung has reiterated that maintaining an efficient and vibrant port continues to be a strategic component of the HKSAR Government’s and HKMPB’s mission.”

The THB also reiterated its practical support of the port.

“The HKSAR Government is committed to maintaining the vibrancy of the Hong Kong Port.  To this end, we have undertaken a dredging project to deepen the approach channel to Kwai Tsing Container Terminals from the navigation depth of 15 metres to 17 metres to enable ultra large container vessels to access the container terminals at all tides.  We just welcomed the world’s largest container vessel in use, with a carrying capacity of over 20,000 TEUs, into Hong Kong Port on April 15,” the statement added.

Where the THB and Mr Tam are more closely aligned is in the promotion of Hong Kong as a regional centre for maritime services. Mr Tam suggested that Hong Kong should develop maritime services such as insurance and legal services to the ports in the region.

The THB agrees, stating: “With its institutional strengths from its established maritime heritage and the “one country two systems” principle, Hong Kong is also a mature maritime services centre, with the capability to provide high value-added services like ship finance, marine insurance, maritime law and arbitration, ship management, etc. to major maritime economies globally.”

Hong Kong Container Terminal’s Association chairman, Jessie Chung, also came out in strong support of the port yesterday:

“Hong Kong has an important role to play as the region’s logistics hub. In 2015, 8.7% of Mainland external trade was attributed to the bilateral trade between Hong Kong and Mainland China, with 49% of Hong Kong’s import cargo from the Mainland and 53.7% of Hong Kong’s exports bound for the Mainland,” she told Hong Kong Maritime Hub.

Ms Chung was also keen to point out that it was not the Government of Hong Kong alone in supprting Hong Kong’s role.

“In March 2016, the “Outline of the 13th Five-Year Plan for the National Economic and Social Development of the People’s Republic of China” expressed support for Hong Kong in enhancing its status as a centre for international finance, transportation and trade.

“The establishment of the Maritime and Port Board in April 2016 also demonstrated the government’s commitment to maintaining the port’s vibrancy and competitiveness.

“Similarly, a November 2016 report published by the Hang Seng Management College on the “Impact of Cabotage Relaxation and PRD Competition to Hong Kong’s Maritime Logistics Industry” stated that a vibrant terminal business is key to maintaining Hong Kong as a commercial hub in the region,” she added.

But the said report referred to by Ms Chung also suggests that if the incremental relaxation of China’s cabotage rules beginning in Shanghai in 2013 and extended to Shenzhen, Nansha and Qingdao in 2016, continue Hong Kong could see volumes fall off 14%.

The future of Hong Kong’s port has been a source of contention since slipping into a period of relative decline from the world’s busiest port to its number five ranking today. This has prompted some commentators to suggest that the port is an example of a sunset business for Hong Kong, and the territory would be better served if it was demolished and replaced by sorely needed housing.

But Hong Kong port, handling a total of 19.8m teu in 2016, is an important tenet of Hong Kong’s economy, underpinning the territory’s success as an international trade and logistics hub. Trading and logistics account for 22% of our GDP and 20% of total employment.

In an interview with the South China Morning Post in March this year Ms Chung warned of the consequences of allowing the port to disappear.

“All Hong Kong will pay the price if the container port fails and logistics prices will be very high,” she concluded.

 

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