Hong Kong Committed to Enhancing Supply Chain Connectivity

For more information, please contact:
Melissa Ng / David Hsieh at 212-752-3320
Daniel McAtee at 202-238-6360
Wing Yan Tong at 415-835-9315

November 19, 2009 - The Hong Kong Government is committed to enhancing the city’s position as the preferred regional logistics hub – improving critical infrastructure to enhance connectivity all along the supply chain and facilitating business operation, said Hong Kong Commissioner for Economic and Trade Affairs, USA, Mr. Donald Tong.

Delivering the keynote address at the “International Intermodal and its Domestic Connections” seminar in Lombard, Illinois on Thursday (November 19, US time), Mr. Tong, said Hong Kong’s efforts to tap the region’s enormous growth potential are driven by 10 major infrastructure projects.

The logistics sector contributes to about 5% of Hong Kong’s GDP and provides about 210,000 jobs or some 6% of the territory’s workforce.

“The various projects, many directly related to the transport industry, are expected to add US$12.8 billion in value to our economy and create about 250,000 new jobs,” said Mr. Tong.

One of the most notable projects is the 18-mile Hong Kong-Zhuhai-Macao Bridge. At an estimated cost of US$5 billion, the bridge is expected to open by 2015/2016, trimming the travel time from Zhuhai to the Hong Kong International Airport from four hours to 30 minutes, significantly reducing transportation costs.

Mr. Tong pointed out that the bridge would also open up the Western Pearl River Delta consumer markets for cargo as a 50-million consumer base comes within a three-hour commuting radius of Hong Kong.

“The improved connectivity will bring new impetus for Hong Kong’s freight and logistics sector,” he said.

Construction of the Guangzhou-Shenzhen-Hong Kong Express Rail Link is expected to start by the end of the year. This rail link will cut down the travel time between Guangzhou and Hong Kong from the current 100 minutes to 48 minutes.

“More importantly, it will put Hong Kong on the map of China’s high-speed railway system. Upon completion, travelers in Hong Kong could choose to visit other Mainland cities by train instead; e.g., the Shanghai – Hong Kong train connection would only take about eight hours,” said the Commissioner.

Mr. Tong added that the government is also studying the feasibility of a Hong Kong-Shenzhen Airport Rail Link, which would allow passengers to travel from Hong Kong International Airport to the Shenzhen Airport in approximately 20 minutes.

Despite the global financial crisis, Hong Kong’s container port, the third busiest in the world, handled a record 24.5 million TEUs in 2008 or 2.1% growth over 2007.

In response to regional and global increases in container traffic, Hong Kong is undergoing a feasibility study on developing a 10th container terminal.

With its strategic geographical location within five hours flight from half of the world’s population, the government is also pursuing expansion plans of the Hong Kong International Airport with the Airport Authority to provide additional aircraft stands and apron facilities as well as studying the feasibility of adding a third runway to meet future needs.

In 2008, Hong Kong International Airport handled over 3.6 million tons of air cargo, making it the busiest international air cargo hub in the world. In an effort to build up capacity, a new air cargo terminal coming online in 2013 will add 2.6 million tons of cargo handling capacity. This is in addition to the 10 additional air cargo parking stands that have been completed.

Aside from the physical infrastructure links, Hong Kong has also deepened its economic links with the Mainland of China including through the Closer Economic Partnership Arrangement (CEPA), Kong’s free trade agreement with Mainland China.

Under CEPA, goods manufactured in Hong Kong are given tariff-free entry into the Mainland market while Hong Kong service suppliers in over 42 sectors – including logistics, banking and insurance – enjoy preferential access in the Mainland.

Mr. Tong pointed out that CEPA is nationality blind and thus overseas firms, including American businesses, that are incorporated in Hong Kong can enjoy its full benefits.

“As far as the logistics industry is concerned, CEPA allows freight forwarding agencies established by Hong Kong companies in the Mainland to open their branches once they have fully injected the registered capital while other foreign companies are only permitted to do so one year after they have set up the relevant Mainland enterprises,” said Mr. Tong.

Organized by the Hong Kong Economic and Trade Office, New York, and the Hong Kong Trade Development Council and in collaboration with the Chicago Traffic Club, the seminar also featured Mr. Willy Lin, Chairman, Hong Kong Shippers’ Council and Mr. Lawrence Yip, Executive Vice Chairman, Chamber of Hong Kong Logistics Industry.

The seminar was attended by more than 160 people from the logistics and distribution services trade in Chicago and nearby areas.

Following the seminar, the Commissioner called on Mayor Richard M. Daley in Chicago and exchanged views with him on issues of mutual interests.