vested in Hutch Port
Why Hong Kong’s container port may be in terminal decline, and what that would mean for a city that appears not to careHong Kong’s wealth has grown with the container shipping trade for five decades, but if the city’s port is allowed to decline much further it could go under, with big consequences for consumers and employment
In 2015, Hong Kong’s port was the world’s fifth biggest, still significantly larger than those of Xiamen in southern China, Rotterdam and Los Angeles.
Chinese ports are closer to the country’s factories, and they have over the past decade they have expanded and upped their game, often under Hong Kong ownership.
While Hong Kong’s container throughput has tailed off significantly since 2015, its share of total Pearl River Delta throughput has been shrinking for 15 years, from 77.8 per cent in 2001 to 45.3 per cent in 2015.
Changes in China’s rules for what is known as cabotage – the shipping term for transporting cargo between a country’s domestic ports.
Future of Hong Kong's container port industry in jeopardy
For many years, Hong Kong has benefitted from Chinese cabotage rules which (like those of many countries, including the United States) allow only Chinese-owned and -flagged vessels to carry cargo between domestic ports.
In practice, this has meant that international shipping lines opt to access Chinese ports via Hong Kong (which counts as an international, not a Chinese port under the “one country, two systems” arrangement) and so avoid the cost and risk of using a Chinese third-party carrier.
In September 2013, cabotage rules were relaxed within the Shanghai Free Trade Pilot Area, and in 2016 this relaxation was extended to the ports of Qingdao, Shenzhen and Nansha. This rule change means those ports can now do the same job as Hong Kong and act as transshipment hubs for smaller Chinese ports.
Wong’s team calculates it could result in a 14 per cent decrease in the Hong Kong port’s container throughput.
Throughput is decreasing 1 per cent to 3 per cent every year”
A 2015 report by Deutsche Bank is less optimistic, forecasting the port’s business will shrink by 50 per cent in 10 years.
Source: SCMP
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