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Promoting the development of high value-added maritime cluster
The seven-day Hong Kong Maritime Week (The Maritime Week) 2022 came to a successful conclusion yesterday. The Maritime Week's activities included large-scale international fora discussing the prospects of the shipping industry, seminars introducing the latest developments in maritime law, as well as light-hearted promotional activities for the general public and youth, such as Mock Arbitrations, Hong Kong Maritime Services Training Institute Career Day, and Hong Kong Maritime Museum Family Fun Day. The Maritime Week has the objective of showcasing the role and development of Hong Kong's international maritime centre, particularly the accelerated development of its high-value added maritime cluster, as well as raising the public awareness of the industry and its career prospects, allowing the next generation to have more options when exploring their career development.
As the signature event of the Maritime Week this year, the theme of the Asian Logistics, Maritime and Aviation Conference (ALMAC) is "The Future of the Sustainable Supply Chain: Connectivity ∙ Collaboration ∙ Innovation". For many representatives of maritime organisations and agencies attending in person, this was their first visit to Hong Kong since the pandemic which has lasted for nearly three years. Together with online viewers, more than 14,000 practitioners from the logistics, maritime and aviation industries participated in ALMAC. At the meeting, I highlighted Hong Kong's core competitive advantages, future development directions, and the huge opportunities brought by the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
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While Hong Kong has maintained its position as one of the top ten ports in the world, its throughput volume has gradually declined over the past ten years. The public would want to know, what are the prospects of the shipping industry in Hong Kong's economic and industrial development?
In fact, 80% to 90% of the world's merchandise goods traded is transported by sea, and this relates to the overall employment in the businesses of commercial goods supply and logistics. The industry spans a wide array of sectors, from shipbuilding and maintenance; financing and insurance of ship sales and purchases; ship agency and ship management; to arbitration that is related to shipping services, etc. Within this large cluster, Hong Kong's shipping industry should eye on high value-added business.
High value-added maritime services
Apart from actively improving port efficiency to strengthen its competitiveness in cargo transportation, Hong Kong has already been developing towards high-end maritime services. At present, there are nearly 900 shipping-related companies operating in Hong Kong, providing a great variety of quality maritime services. The merchant fleet owned and managed by Hong Kong shipowners and ship management companies account for about 10% of the deadweight tonnage of the world's merchant fleet. The Hong Kong Shipping Register ranked fourth in the world. The Hong Kong Port provides frequent and comprehensive liner shipping services connecting to nearly 600 destinations worldwide, with about 270 international container vessel sailings per week.
Hong Kong is an international financial centre efficiently connected to the world, which facilitates shipping companies to meet the needs of financing and ship insurance. Hong Kong has a flourishing marine insurance market. 12 out of the 13 members of the International Group of Protection and Indemnity (P&I) Clubs have presence in Hong Kong, the largest cluster of representatives outside London. Together with the Hong Kong branch of the China Shipowners Mutual Insurance Association, Hong Kong has become the second largest maritime P&I insurance centre in the world outside London.
Hong Kong is also an internationally recognised arbitration centre. The Baltic and International Maritime Council (BIMCO) has named Hong Kong as one of the world's four arbitration venues over two years ago.
Over the past few years, the HKSAR Government has implemented a number of tax concessionary measures to foster the development of high-end maritime services. These include the tax concessions in 2020 supporting ship leasing business and marine insurance businesses; the half-tax concession (i.e. a tax rate of 8.25%) provided to ship agents, ship managers and ship brokers, which were enacted in July this year. These measures have enhanced Hong Kong's competitiveness in attracting clusters in the maritime industry.
With continuous economic development, our country is the world's largest exporter of merchandise goods. With the huge demand for trade and logistics, the demand for services provided by the shipping industry has continued to rise. In the country's dual circulation development strategy, Hong Kong's high value-added maritime services can play a role in connecting the Mainland with the world, and also help Hong Kong serve the global community while integrating into the overall development of the country.
Hong Kong's growth as an international financial centre and international arbitration centre are supporting the transformation of its shipping industry to a high value-added maritime cluster. The application of innovation and technology, and the development of green and sustainable finance, create further potential for the maritime sectors.
High value-added logistics/air cargo
Apart from the development of high value-added maritime clusters, Hong Kong also has a leading edge in air cargo logistics in the world. By strengthening collaboration with various cities of the GBA, Hong Kong's advantages in sea-land-air inter-modal transport will become even more evident. For example, as I mentioned in the Budget earlier this year, we are developing "sea-air cargo transhipment" between the Hong Kong International Airport (HKIA) and the rest of the GBA, with the Airport Authority Hong Kong (AAHK) setting up an upstream HKIA Logistics Park in Dongguan and an airside intermodal cargo handling facility at the HKIA. This will allow export cargo from the Mainland to complete security screening in advance and then be transported seamlessly to Hong Kong. It will then be directly transshipped to all overseas destinations through Hong Kong's international aviation network without the need to undergo further security screening. Similarly, international cargo can also be imported into the Mainland through the reverse process. The AAHK has launched a sea air intermodal pilot scheme for the purpose of testing and establishing the full operational procedures.
We will also further facilitate the flow of logistics information in the GBA and improvements to the inter-modal operation, develop high-end and high value-added logistics services (including the handling of cold chain goods and pharmaceuticals), as well as encourage the logistics industry to make wider use of technology to enhance productivity.
In addition, the 2nd Greater Bay Area Maritime Forum will be held simultaneously in Hong Kong and Guangzhou. The government departments and shipping organisations involved in transport and logistics in Guangdong and Hong Kong have been in close communication and are actively seeking further cooperation to produce the greatest synergy and development of shipping in the entire GBA.
In his important speech on 1 July 2022, President Xi Jinping expressed support for Hong Kong to strengthen its position as an international shipping centre. This is also an important part of our economic development towards higher value-added development. The HKSAR Government will adopt a multi-pronged strategy to consolidate and enhance Hong Kong's status as an international shipping centre and international aviation hub by combining the strengths of a proactive government and an efficient market, with the objective of continuously enhancing the momentum of Hong Kong's development.
November 27, 2022
