In the not so distant past, Hong Kong was regarded as the number one seaport in Asia. Today, it trails behind Shanghai, Singapore, Guangzhou, Qingdao, Tianjin, Ningbo, Dalian and Busan. Hong Kong faces challenges from competition in terminal, freight transportation and related logistics activities.

“China has already emerged as a major shipping centre and the world’s biggest shipbuilder,” said an official with the Hong Kong Trade Development Council (HKTDC). “Commercial principals of Chinese shipping companies might also find it advantageous to set up or augment their presence in Hong Kong, which boasts the world’s fourth-largest shipping register.” 

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Subsequently, the Hong Kong government noted that the city needs to reinforce its maritime services cluster and develop high-value-added maritime services. In its 2016 Policy Address, the government repeated its commitment to strengthen Hong Kong’s role as an international maritime services hub in Asia. It pointed to the formation of a new Hong Kong Maritime and Port Board to be formed by merging the Maritime Industry Council and the Port Development Council. 

Long a free port, Hong Kong adopted measures to improve its tax regime. In December, it entered into double taxation avoidance arrangements specifically related to shipping income with 40 of its major trading partners. It is now actively looking to establish similar arrangements with its remaining trading partners. 

In 2014 the government also launched a HK$100m ($12.86m) Maritime and Aviation Training Fund to support training and incentive schemes. There is also the latest Closer Economic Partnership Agreement signed between mainland China and Hong Kong, which, beginning this year, will allow some liberalisation of trade in services between the two. This should open up opportunities for Hong Kong maritime services providers to fully tap into mainland China.

Officials also expect Hong Kong to benefit considerably from China’s grand strategy, the Belt and Road Initiative (BRI), first proposed by President Xi Jinping in 2013 to link China with Europe through the South China Sea and Indian Ocean.  

BRI comprises two main components: the Silk Road Economic Belt and the 21st Century Maritime Silk Road. This ‘super connector’ is expected to link up 4.4 billion people in more than 60 economies with a gross economic volume of about $22,000bn.

Blueprints for the BRI call for some $160bn in China, with total investment in countries along the route expected to reach almost $900bn.