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Home > Business/Finance > Diversified Services > Shipping & Logistics
Hong Kong Freight Transport Report Q3 2007
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Hong Kong’s ports and shipping industry continues to face a big competitive threat from China. As the
manufacturing boom has spread through southern China, up to Shenzhen and other parts of Guangdong
province, new ports have been built along the Pearl River, and shipping activity is following the factories.
This is a deep, and some would say irreversible structural change. In the words of one Hong Kong
specialist, ‘Hong Kong used to be the entrepτt, the gateway to China. Now China has its own gateways.’
One pointer is that plans for another big container terminal at Hong Kong - CT10 - have been placed on
hold. BMI’s newly released Hong Kong Freight Transport Report Q3 2007 concludes that sea-borne
freight forecasts need to be trimmed to take account of the growing competitive threat from rival ports,
with lower labour costs, such as Shanghai and Shenzhen. An additional factor to bear in mind is the
downturn of the global shipping cycle, with freight rates showing some signs of weakness. We expect
Hong Kong’s port throughput to grow by an annual average of 2.9% in 2007-2011, down from the 7.8%
figure achieved over the preceding five years.
All the evidence indicates that the powerful economic boom in mainland China will continue to create a
complex mix of opportunities and threats for Hong Kong. In general, as the Special Administrative
Region (SAR) repositions itself, we believe it will be the higher value/lower bulk transport modes that are
most resilient. So we remain confident about prospects for airfreight, particularly for regional trade in
electronics, IT products and express/parcel delivery. Airfreight capacity will also grow as a result of the
expansion of the passenger business, driven by the spread of low-cost airlines. In addition, Hong Kongbased
Cathay Pacific has negotiated preferential access to more routes into the mainland, through its
takeover of Hong Kong Dragon Airlines (Dragonair). BMI’s forecast is now that airfreight volume
(measured in mn tonnes) will grow by an annual average of 5.8%, lower than in the preceding five years.
The territory retains some extremely important advantages. In BMI’s freight transport business
environment rating Hong Kong scores a total of 46 (out of a potential maximum of 70 and compared to a
regional average of 44.7), with particular strength in both the regulatory and competitive environments
and a satisfactory showing in the ratings for long-term economic risk and infrastructure growth. This will
continue to make it an attractive place for the freight industry, more so if it can begin to grapple with its
higher costs relative to the mainland.
Overall, BMI remains optimistic that Hong Kong will be able to adapt to the new situation and remain an
important regional trading centre. In our projections, the total value of transport and communications
GDP will rise to US$30.1bn in nominal terms by 2011, representing 10.9% of Hong Kong’s GDP.
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