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Wednesday, November 15, 2017, 00:21
All-round strategy needed to consolidate shipping center status
By Edward Liu
Wednesday, November 15, 2017, 00:21 By Edward Liu

Edward Liu believes SAR government has crucial role to play in ensuring city regains its former role as a leading maritime hub.

In her maiden Policy Address last month Chief Executive Carrie Lam Cheng Yuet-ngor set out 251 new policies. She did not address the shipping industry in great length. But the policy plan did specify Hong Kong’s position as an “international maritime center” and a “diversified” one; it also outlined the comprehensive strategy to bolster and promote the development of Hong Kong’s maritime industry and high value added maritime services.

Revealing its short-term goal, the government vowed to attract overseas maritime enterprises to build their presence in Hong Kong. One of the milestone successes in this regard was the signing of a memorandum of understanding with the London Maritime Services Association in September this year. The agreement aims to further strengthen collaboration in promoting high value added maritime services and training of maritime practitioners. Trade facilitation measures, including strengthening the city’s shipping register services, were also listed. 

The most important touch was ensuring the Hong Kong Maritime and Port Board, an official consultative organization established last year, will actively work with the shipping industry to formulate a “comprehensive strategy”, establishing the crucial role of the government in the future development of local shipping industry.

In all fairness, despite the board falling short of industry expectations, it has managed to speak and act for the shipping industry in the past year. 

As the first Hong Kong Maritime Week took place last November, the voices of Hong Kong shipping and port industry were heard again in the city, across the country and on the international stage. The second Maritime Week will take place this month. The board certainly deserves credit for increasing the number of participants, of countries they represent and the event scale. In addition, the Hong Kong Maritime and Port Board should also be appreciated for facilitating the signing of the Hong Kong-London memorandum of understanding as well as an academic cooperation plan between the University of Hong Kong and the Shanghai Maritime University in August.

Further, the Policy Address assured that the government was actively promoting Hong Kong’s shipping registry service to overseas ship-owners through the Economic and Trade Offices on the Chinese mainland and other places in the world. The industry has long eagerly sought this move to strengthen the traditional shipping industry and promote high-value shipping services. 

Under the current Merchant Shipping (Safety) Ordinance, only the director of the Marine Department can issue relevant certificates for vessels registered in Hong Kong. Since the city’s return to China in 1997, the number of vessels registered in Hong Kong has increased from over 400 to more than 2,500, making Hong Kong the fourth-biggest registry in the world. Given the sheer volume, it is difficult for the director to timely issue all relevant certificates to Hong Kong registered vessels sailing all over the world in different time zones. 

The Economic and Trade Offices located in many countries and territories would no doubt help reduce the Marine Department’s workload and increase efficiency. This will definitely help promote Hong Kong’s registry among worldwide ship-owners and thus inject new impetus into the city’s shipping industry.

These uplifting achievements would help consolidate Hong Kong’s position as an international shipping center. However, it is still not enough to bring back the past glory of this industry. 

The special administrative region government should hasten discussions with the industry representatives and formulate a long-term development strategy for the continuous development of traditional shipping and port services and other services including shipping arbitration, shipping financing and ship management as well as updating shipping laws.

For instance, the government can attract foreign shipping and port enterprises to set up branches in Hong Kong by offering tax and financial benefits; it can also implement more convenient supervision so that the protection and indemnity insurance clubs in Hong Kong will explore the possibility of providing insurance and seek opportunities for shipping commercial law and arbitration service providers under the country’s Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area plan. 

This can go along with efforts to explore the possibility of establishing a Guangdong-Hong Kong “Joint Shipping Trading Center”. That entails cooperation between Hong Kong ship-financing entities and ship-building entities in Guangzhou and Nansha. Meanwhile, Hong Kong has the potential to be the best resolution center for shipping disputes in Asia. 

Moreover, the government should promote “Smart Shipping” development so Hong Kong can transform into an innovative shipping center, leading in the exploration of new businesses in areas such as port-city interaction, bay area economics and integration of city groups.

All these require the SAR government to play an active and leading role. It must work closely with the industry to come up with a comprehensive plan to consolidate its position as an international shipping center.

The author is a senior associate at Reed Smith Richards Butler and vice-president of Hong Kong and Mainland Legal Profession Association.

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