As the territory kicks off its latest maritime week Splash looks at what local authorities are doing to make shipping a greater source of business.
At the time of Hong Kong’s reunification with China 21 years ago it was the undisputable maritime centre of Asia. Successive administrations that followed failed to bolster the city’s shipping credentials and the local shipping community watched on as its dominant position was overtaken by Singapore with Shanghai also rising rapidly.
The last few years however have seen local government listen to the private sector and take heed of how important maritime is to the economy.
In her second policy address since coming to power last year, Carrie Lam, the chief executive of Hong Kong, last month made good on earlier promises to boost maritime spending.
“We will continue to serve as the best springboard for mainland maritime companies seeking to go global, and to provide facilitation for international maritime organisations to set up a presence in Hong Kong and tap the mainland market,” Lam said in a lengthy policy address.
Among new measures, the Hong Kong government will look to implement tax relief proposals for marine insurers and ship leasing companies. A further HK$200m ($25.5m) will be injected into the city’s Maritime and Aviation Training Fund.
Lam also promised to spend more developing the Hong Kong Shipping Registry, the world’s fourth largest shipping flag, and an institution local owners have been crying out for more financial backing. Regional desks in selected government overseas and mainland offices will be created to provide support to shipowners and promote the registry.
Finally acknowledging the brain drain of shipping expertise from local shores to rival maritime hubs, the Hong Kong government in August unveiled a scheme whereby shipping professionals will be among 11 skill types welcomed into the city with easier immigration processes.
Among the 11 professions earmarked to get priority to live in the city even if they do not have a job lined up yet are marine insurers, naval architects, marine engineers and ship superintendents.
In May this year, Hong Kong’s Financial Services Development Council (FSDC) released a research report, addressing the importance of developing a significant maritime financing and leasing industry in Hong Kong.
The report has recommended various measures for developing the maritime cluster in Hong Kong, including tax concessions for maritime firms; allowing qualified investors to access credit and liquidity enhancement products supported and/or endorsed by sovereign-rated financial institutions; full consultation with the industry on implementation of a tax review package; encouraging the growth of shipping and maritime-related support and management services; talent development in the maritime cluster; further double tax agreements with major shipping jurisdictions; increased participation in international industry bodies by Hong Kong-based organisations; and upgrading the Hong Kong Maritime and Port Board or creating a centralised maritime office.
The belated efforts by local government to bolster the city’s shipping credentials have been noticed. The fifth annual Xinhua-Baltic International Shipping Centre Development Index Report, published in July, saw Hong Kong overhaul London for the first time into second spot behind perennial rival Singapore. In a note to readers towards the back of the report, Mark Jackson, chief executive of the Baltic Exchange, wrote: “We hope that this report helps shape shipping company executives’ thinking and spurs cities and their governments to provide the best support possible. A successful shipping centre is after all a successful global city.” Hong Kong likes to promote itself as a global city; finally it is remembering that it is also a shipping hub.
This article first appeared in the just published latest issue of Maritime CEO magazine. Splash readers can access the full magazine for free by clicking here.