Shipping logistics and commerce have always been one of the pillars of Hong Kong’s economy and the “14th Five-Year” Plan clearly supports Hong Kong in enhancing its status as an international financial, shipping and trade center, which shows that Hong Kong will fully leverage its existing strengths while integrating into the country’s overall development, giving the business community a powerful shot in the arm.
Willy Lin: Strengthen competitiveness of Hong Kong enterprises to herald opportunities under “14th Five-Year” Plan
Hong Kong currently has about 340,000 small and medium enterprises (SMEs), which are veritably the mainstay of its economy as they constitute over 90% of its business establishments. Willy Lin, Chairman of the Hong Kong Productivity Council (HKPC) and Chairman of the Hong Kong Shippers’ Council, said that SMEs must get themselves better equipped early as the development of technologies has led to the rise of many emerging industries, and HKPC will spare no effort to help SMEs capture the huge business opportunities under the “14th Five-Year” Plan.
Leverage new technologies to raise productivity
The “14th Five-Year” Plan clearly proposes to construct a Digital China, while the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area also proposes strengthening innovation and technology (I&T) cooperation in the Greater Bay Area. Lin estimated that 8.5 million people worldwide will lose their existing jobs sometime in the future, but 9.5 million new jobs will be created at the same time, so enterprises should equip themselves with new technology applications as soon as possible. “HKPC will help SMEs while providing corresponding support in the areas of start-up support, digitalization and cybersecurity.”
Citing an example, he said that the “Smart Port” and high value-added logistics proposed by the Chief Executive in the latest Policy Address are closely related to the application of technologies in the logistics industry. “The advent of 5G technology has made smart autonomous driving gradually more widely adopted. The logistics industry’s competitiveness will improve effectively if autonomous driving can be widely adopted in areas such as container terminals and airports.”
“14th Five-Year” Plan is future growth engine
From a macro perspective, Lin believes that the biggest development opportunity for Hong Kong enterprises in the future undeniably lies in the “14th Five-Year” Plan. He added that HKPC has put formulated a slew of relevant support measures, including those to: 1. Support enterprises in strengthening I&T, support and participate in the construction of the National Comprehensive Technology Innovation Centre and the Hong Kong-Shenzhen Innovation and Technology Park in Lok Ma Chau Loop, and build a shared technology platform. 2. Promote the integrated development of technologies such as artificial intelligence, robotics and Industry 4.0 with various industries. 3. Provide a “technological innovation dual circulation” center and platform, set up joint laboratories, jointly apply for projects co-funded by the Mainland and Hong Kong, and jointly hold high-level professional conferences and events. 4. Facilitate integrated development, promote intellectual property protection and transfer of science and technology achievements, and establish a platform for the “Belt and Road”.
Future development trends also include green economy. Lin believes that enterprises are set to capture huge business opportunities amid sustainable development related to greening and carbon reduction. A case in point is the logistics and transportation industry where the use of environment-friendly energy will be a major direction for future development. “In Hong Kong’s shipping industry, currently some enterprises have begun to use LNG, while green energy such as hydrogen energy and electric energy are developing rapidly. These areas are poised to involve very large investments in the next few decades, so enterprises should better equip themselves early.”
Li Jun: Construction of a shipping center with Hong Kong characteristics
Hong Kong is an important shipping hub in Asia today. Li Jun, Deputy General Manager of Associated Maritime Company, a member of China Merchants Group, said that this is particularly due to close interaction with the Mainland. From 1949 to 1979, relying on its strengths as a free port, Hong Kong became a window and bridge for the Mainland to access the international shipping market. “At this stage, many Chinese and overseas Chinese shipowners fully leveraged Hong Kong’s special position to rapidly grow their business, turning Hong Kong into a genuine hub for international shipowners.”
The rise of Hong Kong as a shipping center
The Mainland’s import and export trade grew substantially during its reform and opening-up. Li noted that at that time, port construction restrictions made it difficult to open trunk liner routes, while Hong Kong took advantage of its superior position and deep-water ports to become an important hub port for several shipping routes and the main transit port for the Mainland. After 2004, amid the Mainland’s rapid growth in import and export trade, Hong Kong’s port development began to slow down and entered a new stage of development.
Greater Bay Area’s port cluster has unlimited potential
Looking back at the development of Hong Kong’s shipping industry, Li believes that it owed its success to several unique strengths. “First of all, ‘One Country, Two Systems’ has made Hong Kong not only a vital gateway for the Mainland to ‘go global’, but also an important entryway for countries around the world to access the Mainland. In addition, as an international financial center, Hong Kong offers considerable convenience for the asset-heavy shipping industry to seek financing.” He noted that there are currently 47 shipping companies listed in Hong Kong, which is also a world-renowned flag state (region), ranking the fourth largest ship registry in the world.
Li stressed that the vast Greater Bay Area hinterland will likely inject strong impetus into the future development of Hong Kong’s shipping industry. “From the perspective of container throughput, Hong Kong by itself only ranks ninth in the world, but the total container throughput of the port cluster in the Greater Bay Area is not only much larger than that of Singapore, but also rivals that of the Yangtze River Delta’s port cluster.”
Four suggestions to strengthen the position of Hong Kong’s shipping industry
The “14th Five-Year” Plan clearly states that it will continue as in the past to support Hong Kong in enhancing its status as an international financial, shipping and trade center. Specifically, Li put forward four suggestions: First, Hong Kong can act as a bridge in the Greater Bay Area to connect with the international community, driving the Greater Bay Area to jointly build a world-class port cluster, airport cluster and high-end shipping service cluster. Second, fully leverage Hong Kong’s mature legal system and well-developed high-end service support capabilities to form a complementary structure with the other cities in the Greater Bay Area. Third, cultivate Hong Kong’s new functions in introducing innovative shipping technologies and incubating new shipping industries. Fourth, the HKSAR Government should team up with industry groups to actively make their voices heard in the international shipping industry, study and formulate industry rules and international standards with the characteristics of the new era, and comprehensively promote the upgrading of industry efficiency.
Li stressed that in the future, Hong Kong’s shipping industry should continue to strengthen its competitiveness by leveraging Hong Kong’s strengths made possible by “One Country, Two Systems”, its unique location and its mature capabilities in professional services such as legal and financial services.
Ian Kwok: Fortifying Hong Kong’s position as a leading air cargo hub
The Hong Kong International Airport (HKIA) is a leading air cargo hub in Asia. According to Ian Kwok, Acting General Manager, Aviation Logistics of Airport Authority Hong Kong, HKIA has been the world’s busiest international cargo airport since 1996. It carries significant weight in Hong Kong’s foreign trade.
Hong Kong boasts excellent air freight efficiency
Kwok believes that the air freight efficiency of HKIA is underpinned by two main competitive edges. “Hong Kong has an expansive aviation network. Before COVID, some 120 airlines were operating in our airport and making way to about 220 destinations every day. Over half of the world’s population can be reached by planes departing from Hong Kong within five hours’ time. The 24-hour customs clearance service offered on-site at our cargo terminal means that shipments can be accepted up to three hours before flight departure. This is the efficiency of courier services for many other airports.”
Targeting high value-added, high growth logistics
Kwok added that the HKIA will focus on developing in high value-added areas in future. “We envision to establish HKIA as the e-commerce hub of Asia. We have already allocated some land to a joint venture led by Alibaba’s Cainiao Network for the construction of a high-end logistics center. Upon its scheduled completion in 2023, the center will add 1.70 million tonnes to Hong Kong’s air cargo throughput.”
Temperature-controlled cargos are also undergoing expedited growth in recent years. Kwok pointed out that HKIA has been actively pursuing the leader’s position in temperature-controlled air transport. “As such, HKIA has built a series of facilities tailored for cold chain logistics. This will ensure that seamless cold chain services are available for temp-controlled shipments.” He added that HKIA has already obtained certifications from the highest standards around the world.
Connecting with GBA and aiming for smart development
Another growth direction for HKIA is to enhance global connectivity and accessibility. Speaking of the vast Greater Bay Area market, Kwok commented that HKIA will continue to strengthen and cement its role as the Greater Bay Area’s international cargo gateway. “We have plans to develop the HKIA logistics park in Dongguan. This arrangement would enable us to expand HKIA’s services to Dongguan, so that the airport’s cargo service can keep abreast with the development of our hinterland in Greater Bay Area.”
Kwok also revealed that HKIA is working towards the establishment of a smart air cargo community. “Riding on blockchain technology, the entire air logistics supply chain will be integrated onto this platform, and shipment tracking and enquiry will become more convenient. In the long run, the efficiency of the air logistics supply chain will be further improved.”
