Edward Liu urges greater government policy support before more maritime companies set sail for friendlier harbors

On April 1 last year the Hong Kong government officially announced the members of the newly established Hong Kong Maritime and Port Board (MPB). They were selected mainly from the shipping industry, academia and shipping-related bodies.

The MPB was set up at a time when Hong Kong's once world-leading pillar sector was suffering a continuous decline. In the past decade, the city's maritime industry has had the unpalatable experience of being left behind by its competitors - namely Singapore, Shanghai and Shenzhen.

A lack of direct policy support, increased costs and other factors have led Hong Kong shipping companies to choose to re-domicile in Singapore for shipping services in recent years. In 2015, Hong Kong's port was finally surpassed by Ningbo-Zhoushan Port and ranked fifth in terms of container throughput, though it was once the world's No 1.

From January to September last year throughput continued to decline but growth finally turned back into positive territory in the final quarter of last year.

It has been suggested that the Maritime Industry Council and the Port Development Council have failed to proactively and effectively function to their fullest potential.

According to the outgoing Chief Executive Leung Chun-ying's Policy Address last year, the MPB was established to develop high value-added shipping services to enhance the city's role as an international shipping center.

Similarly, Chief Executive-designate Carrie Lam Cheng Yuet-ngor stressed in her manifesto that the next administration should take the lead to formulate strategic plans for comprehensive development of the shipping industry.

The MPB was formed by merging the Maritime Industry Council and Port Development Council - two bodies established in 2003 for similar purposes. To avoid a mere "old wine in a new bottle" style of makeover, the next administration must first figure out what the real problems needing to be tackled are.

First of all, the main reason cited for the increased re-location of shipping-related businesses to other places is the lack of policy support. While the government has voiced its support for the shipping industry, it has not provided any direct funding or policy measures.

For instance, due to the unique nature of the industry liner companies generally operate through coalition liner routes to reduce costs. But this alliance may violate the Competition Ordinance, which just came into force at the end of 2015. The sector made a"block exemption" application almost immediately to the Competition Commission. The application brought a pledge but no action so far.

This uncertainty has resulted in shipping companies reducing their use of berthing at the Hong Kong container terminals.

In this kind of extraordinary event, the MPB should play a proactive role. It should expeditiously collect views from the shipping industry, seek support from relevant government agencies and represent the industry in negotiations with the Competition Commission with the aim of eliminating any uncertainty, pitfalls and drawbacks. In addition, faced with the industry depression, the MPB should urge the government to provide more support to cargo ships docked in Hong Kong, such as offering concessions for dry bulk carriers and container ships which call at Hong Kong port and berth no more than a certain period of time.

Secondly, the MPB should vigorously promote Hong Kong's shipping services, especially its high-end shipping services in the mainland and overseas markets. It can collaborate with the Hong Kong Trade Development Council and Invest Hong Kong for this purpose, and organize international or regional shipping industry-related conferences and activities.

Meanwhile, the maritime body should keep a close relationship with other industry bodies such as the Hong Kong Shipowners Association, and actively liaise with the mainland authorities, seeking the support of favorable policies at the national level.

Lastly, talent is always the foundation of any sector. The MPB should take stock of the human resources in the industry and initiate market-oriented training programs. This will attract more people to pursue a career in the shipping industry.

Currently the Hong Kong Polytechnic University has a department of logistics and maritime studies. The new maritime body should help this department seek more opportunities to run cooperative education with other maritime academies, such as Shanghai Maritime University and World Maritime University (which was established by the International Maritime Organization). This can enhance the diversity of shipping education and training in Hong Kong.

Meanwhile, the MPB should seek favorable immigration policies for the shipping industry to recruit overseas talent. This will help make Hong Kong a favored place for international shipping talent to pursue their careers.

The nation's 13th Five-Year Plan (2016-20) supports Hong Kong in consolidating and enhancing its status as an international shipping center. Meanwhile, the city will in coming years greatly benefit from the Belt and Road Initiative, which is expected to create enormous business opportunities for shipping companies and related services.

As the global economic gravity continues to shift to the East from the West, Hong Kong - with its excellent geographic location, international networks and institutional advantages under the "One Country, Two Systems" principle- will certainly be able to play the role of"super-connecter" between the mainland and international markets.

For the SAR to put its strengths into full play, the maritime body must lead the local shipping industry to strengthen its traditional edges and unleash its potential.

(HK Edition 04/26/2017 page8)