Ahead of Hong Kong Maritime Week, Splash today publishes an 80-page magazine on the Special Administrative Region.
Recent weeks have seen plenty of much needed focus on reestablishing Hong Kong as a leading international maritime centre (IMC). The climb back up the ranks will not be easy, but finally there does appear greater maritime emphasis within government.
At the turn of the century Hong Kong was Asia’s preeminent maritime centre, a position that has been eroded over the past couple of decades.
The 2024 Leading Maritime Cities (LMC) report from DNV and Menon Economics published in April saw Hong Kong fall to 12th place on the list of the top 50 shipping hubs around the world. As recently as 2019, it ranked in fourth place.
In mid-October, giving his third annual policy address, Hong Kong leader John Lee announced the establishment of an industry-led Maritime and Port Development Board to assist the government in putting forward policies and long-term development strategies.
The Hong Kong Maritime and Port Development Board, which replaces the existing Hong Kong Maritime and Port Board established in 2016, will act as a high-level advisory body. It will be chaired by a non-official member when the Secretary for Transport and Logistics Lam Sai-hung steps down from the role, with other members largely from the shipping industry.
Lee stated that additional funding will be provided to enhance the reformed body’s research capabilities, strengthen its promotional work in mainland China and overseas, and step up manpower training.
Commenting on these developments, Angad Banga, chairman of the Hong Kong Shipowners Association (HKSOA), said: “It has been the consensus of the industry for many years that an independent, industry-led body is needed for Hong Kong. The appointment of a non-official to take up the chair of the new organisation and the strengthening of its research, promotion and talent development functions are certainly the right step forward.”
Lee further said that additional efforts to boost the city’s maritime credentials will be dedicated to developing “high value-added and professional services”, by providing tax exemptions for ship leasing businesses and offering half-rate tax concessions for marine insurance, shipmanagement, ship agency and shipbroking.
Other measures include promoting tax concessions, attracting maritime service enterprises to establish a presence in Hong Kong, accelerating the construction of a green shipping centre by promoting the greening of registered ships, building a green bunkering centre, and providing supporting measures for green bunkering.
One common slice of praise for the government from shipowners polled for this magazine has been the other news from the Lee address that a commodity trading ecosystem will be created.
“Commodities including metals and minerals account for more than half of the global shipping trade volume,” Lee said.
Hong Kong must react faster and more consistently to requirements in digitalisation and sustainability
“Shipowners and commodity traders are the key users of shipping routes and maritime services. Their presence and operation in Hong Kong can drive the maritime services industry, and boost demand for related financial and professional services such as hedging activities of related futures products, conducive to consolidating and enhancing Hong Kong’s status as an international financial, shipping and trade centre.”
The government will explore the introduction of tax concessions and support measures to attract relevant enterprises while an international commodity exchange has expressed its intentions to establish accredited warehouses in Hong Kong for storage and delivery of commodities, including non-ferrous metal products.
“For shipowners, cargo remains king, and we are pleased to hear in the latest chief executive’s policy address that there are plans to establish an international commodity exchange. Their additional presence will drive demand for valuable maritime services,” comments Tabitha Logan, a director at Cetus Maritime, one of the city’s largest dry bulk owners.
New Chamber of Shipping
On top of this, the Hong Kong Chamber of Shipping has just been launched as a body designed to boost the city’s credentials as an IMC.
CY Leung, former head of the territory, is one of the chamber’s co-founders, with Hing Chao, the head of Wah Kwong Maritime Transport, serving as its chairman.
“Ports, shipping companies in China, as they become more international, they will naturally want to tap into Hong Kong’s high value-added maritime service,” Chao said at the launch of the new body while Leung urged stakeholders to leverage Hong Kong’s strengths and adopt a holistic approach, calling for greater coordination among the shipping, trade, finance, professional, and educational sectors.
The glory days
Matthew Mcafee, president of local owner Fairmont, is hopeful by what he is seeing from the Lee administration, and he advises those tasked with promoting the city’s maritime credentials to hark back to its glory days.
“Our hope is that the Hong Kong government outs an emphasis on Hong Kong’s history as an international maritime centre and hub for shipping in Asia. We should not hide from our history but celebrate it,” Mcafee says, advising government to promote the city to shipowners by reminding them what makes the place unique and special.
“Hong Kong’s location, access to capital, lower taxes, and common law arbitration are ideal for international companies and shipowners,” Mcafee says.
Gautam Chellaram, executive chairman of local dry bulk concern KC Maritime, agrees with his Fairmont counterpart – the world needs reminding of Hong Kong’s core strengths.
Old Hong Kong hands in shipping have seen the city face many challenges and overcome them
“Hong Kong for decades was the gateway to the Orient and every effort must be made to remind the larger maritime community of this,” Chellaram says.
Chelleram’s advice to government is to establish clear policies that support the growth of the maritime industry, including tax incentives, subsidies, and streamlined regulations. The city could also be developed as a strategic bunkering hub, especially for alternate fuels, while also promoting research and development into maritime technology.
To attract more shipowners to Hong Kong, it is essential to focus on creating an environment that appeals not only to the business needs of shipowners but also to their families and employees, stresses David Schaus, who runs pipe specialist Irwin Group.
“One of the key factors is ensuring the availability of globally competitive talent,” Schaus says. “While Hong Kong has favourable immigration policies to support this, more must be done to address the educational needs of these professionals and their families.”
Green energy transition
Bjorn Hojgaard, who runs Anglo-Eastern, the world’s largest shipmananager, reckons the government is on the right track, noting the establishment and expansion of ever more overseas maritime companies over the past three years. Continuation of tax concessions for ship agency, shipmanagement and shipbroking businesses will also be helpful in encouraging the further development of Hong Kong’s maritime ecosystem., he says
“We are particularly pleased to see incentives for green shipping, enhancements in port competitiveness, and the intention to spearhead Hong Kong as a world-class maritime hub with the integration of the economic strengths of the Greater Bay Area being front and centre of the government’s action plan on maritime and port development strategy,” Hojgaard says, before cautioning that the city’s long-term viability as an IMC will come down to its ability to position for the green energy transition, and not just for shipping.
“Cities and countries that see the potential in this new energy economy and invest early in developing the port and logistics infrastructure needed to be a prime mover in this new economy will be set up to take advantage of the associated growth and development,” Hojgaard says.
“Hong Kong must react faster and more consistently to requirements in digitalisation and sustainability in order to win against the competition,” argues Firoze Mirza, managing director of shipmanager BSM Hong Kong, citing regional rival Singapore and Shanghai.
Singapore, for example, prepared for a multi-fuel future at an early stage and is consistently expanding its position as a leading bunker hub consciously focusing on new, alternative fuels. And this is already paying off today, Mirza notes, pointing out how bunker sales of marine biofuels and LNG are increasing rapidly there.
“With stronger research and development initiatives focused on maritime technology and sustainability, we could maintain a competitive edge in the industry,” Mirza reckons, adding that would also be helpful to enhance collaboration between the government, industry stakeholders, and educational institutions to develop specialised maritime training programs.
Sailing through challenges
Shipping veteran Richard Hext, the current vice chairman of the Hong Kong Shipowners Association, has the final words in this introduction.
“In the past decades,” he recounts, “old Hong Kong hands in shipping have seen the city face many challenges and overcome them, using its unique geographic position and great native talent. I have every confidence that we can continue to sail through the storms in the years ahead.”
This magazine will be distributed across Hong Kong Maritime Week. Splash readers can access the full magazine for free online by clicking here.
