Find out what Financial Secretary John Tsang has to say.
Speaking at the Asian Logistics & Maritime Conference at the Convention & Exhibition Centre on November 8, FS Tsang said:
Latest global economic forecasts from the International Monetary Fund (IMF) paint a less than optimistic picture for us all. The IMF's projections announced last month predicted global economic growth of 3.3% this year, down from the previous forecast of 3.5%. According to the IMF, the Eurozone will grow by just 0.2% next year and the US economy by 2.1%. Mainland China's economic growth is predicted to remain comparatively strong at 7.8% this year and 8.2% next year.
For logistics and maritime services providers, the long-term prospects in Asia are crucial. The value share of Asian imports and exports in world merchandise trade increased from 25.5% in 2001 to 32.5% last year. China's share alone expanded from 4%, during the same period, to almost 10% (9.9%) over the past decade.
In short, more goods are flowing into, out of, as well as within Asia, not just in absolute terms but also in relative terms. This reflects both the rising consumption power of Asian economies as well as the changing production patterns in a globalised world, particularly the application of supply chains management. Today, sourcing, manufacturing and distribution are constantly reconfigured to take advantage of lower costs and to serve promising markets.
Hong Kong is well placed to facilitate the myriad of supply chains and the growing consumption markets in Asia. Our prime location, world-class infrastructure and extensive multi-modal transport network make our city an efficient logistics hub in the region. We have the world's busiest airport, with cargo throughput reaching almost four million (3.94 million) tonnes last year. Our seaport is the third busiest in the world, handling about 24.4 million TEUs (20-foot equivalent units) last year. We also have direct cross-boundary links to the economic powerhouse of the Pearl River Delta region.
We are constantly upgrading our infrastructure. The Hong Kong Airport Authority is pursuing right now a midfield expansion project to boost handling capacities for goods and for passengers. Further planning includes a proposed third runway to cope with the anticipated demand beyond 2020.
Dredging works at the Kwai Tsing container terminals basin are due for completion by 2016. This will accommodate the increasing draughts of ultra-large container ships. Also, a feasibility study on developing a 10th container terminal is under way. And construction has begun on the 29km Hong Kong-Zhuhai-Macau Bridge. When completed in 2016, the bridge will extend our cargo catchment area to the entire western part of the Pearl River Delta region.
Ultra-friendly business environment
Less visible but equally important are our overall institutional strengths. These include our free port; low and simple tax regime; free flows of capital, information, ideas and talent; rule of law; clean and efficient government; transparent customs procedures; and a well-educated workforce. Together, these create an ultra-friendly business environment. These same traits also underpin our success as a maritime centre providing a full range of professional maritime services to international shipping.
All along, safety remains our very top priority for our industries, and that includes the maritime industry. Many of you will remember that we recently suffered one of the worst maritime tragedies in our city's history. The ferry disaster on October 1 claimed 39 lives.
We have set up a commission of inquiry to investigate the cause of the accident off Lamma Island. The commission will also evaluate the safety of Hong Kong's marine traffic and make recommendations on ways to prevent a repeat of the recent tragedy.
Hong Kong's port handles a high volume of sea traffic, and major accidents are, thankfully, rare. We shall take every necessary measure to ensure a safe environment for all vessels in Hong Kong. We shall also keep the business community and the public up to date on the developments of this inquiry.
In the Logistics Performance Index published by the World Bank in May this year, Hong Kong ranked second among 155 economies. The index rated economies according to the time and cost of logistics services, reliability of import and export supply chains, infrastructure quality, performance of core services and the ease of trade clearance procedures.
While we spare no effort in upgrading our hardware, our bright future lies in building on the wealth of expertise accumulated by people who work in our logistics and maritime services. This will help provide higher value-added services for more clients in more places at the same time. One example is our city's swift rise to become a regional wine trading and distribution hub and the world's top wine auction centre.
Another encouraging development is Hong Kong's emergence as a major art auction centre, with a growing number of auction houses launching sales here. Similar to the wine trade, this has been achieved with the reliability and professionalism of our special logistics services providers.
Uncertain global economy
The outlook for the global economy next year remains rather uncertain. Any further downturn will inevitably affect the maritime and logistics industries, including here in Asia.
At the same time, there are promising opportunities for trade and logistics and maritime services providers throughout our region.
In the meantime, we shall continue to make the most of our advantageous location, world-class infrastructure and credentials as the world's freest economy to develop our maritime and logistics industries.
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