7 December 1999 (Tuesday)

Hong Kong is playing the role as the springboard into the Mainland of China for service industries such as transport and logistics, the Secretary for Economic Services, Mr Stephen Ip, said today (Tuesday)

Delivering a keynote luncheon speech at the Seatrade Hong Kong Conference, Mr Ip said, "Hong Kong, with its huge cargo base, comprehensive and efficient links with the Mainland and the outside world, and first-class telecommunications and IT infrastructure and supporting services, is ideally located to organise supply chain logistics for the numerous manufacturing plants and factories in the Pearl River Delta and the region."

He said, "Hong Kong provides shipping services to 18 major ports as well as 70 river trade ports in the Mainland. On any day some 12 000 container trucks cross the boundary to link with the extensive highway network in the Pearl River Delta."

"As for air transport, our airport offers some 400 flights per week to about 40 Mainland destinations and is expanding as a logistics base for rapid distribution of express freight to the Mainland. Our new airport is operating very efficiently and has won recognition as one of the finest airports in the world."

Mr Ip said, "One of the main advantages Hong Kong have as a logistic centre is that we are already a major international shipping and aviation centre."

There are over 1 000 shipping and shipping related companies in Hong Kong, controlling over 58 million deadweight tonnes of the international fleet. Hong Kong is ranked the sixth-largest maritime centre in the world after Greece, Japan, Norway, the United States, and the Mainland of China.

Mr Ip said, "The Hong Kong SAR Government is committed to providing a conducive environment and the necessary infrastructure for the development of, among other things, logistics business and supply chain management. For instance, we have set up industrial estates which provide low density land at development cost for industries which meet prescribed criteria."

"To strengthen our position as an international air cargo hub, the Airport Authority is inviting interested parties to set up logistics centres and a marine cargo transfer centre in the airport zone. We will also see the full completion of our River Trade Terminal in Tuen Mun next month. The Terminal is well placed to be developed as a logistical centre to support the activities of our port."

To support the development of e-commerce and supply chain logistics, Mr Ip said Hong Kong had excellent telecommunications and IT infrastructure.

"With the support of certification authorities and a clear legal framework, we will provide a safe and secure environment for the conduct of e-commerce by early 2000," he said.

On Hong Kong as an international cargo hub, Mr Ip said, "There are good reasons for international cargo business to choose Hong Kong as their base of operation."

"Apart from playing the role of channelling investments and managerial skills into the economic zones of Southern China, Hong Kong, with its strategic location and comprehensive link with the outside world provides the main conduit for the movement of raw materials into and finished products out of the numerous factories and manufacturing plants in Southern China. This has led to the rapid expansion of the Hong Kong container port and air services."

Mr Ip said, "The Government will continue to work closely with the Hong Kong Port and Maritime Board and the maritime community to enhance the business environment and to make it more attractive for shipowners to invest in Hong Kong, and to make our port more user friendly and efficient."

A double taxation avoidance agreement on shipping was initialled with the Government of Netherlands yesterday (December 6) to provide further tax benefits to shipowners based in Hong Kong and more agreements are on the way.

"Similarly, the Airport Authority will work closely with its business partners and the Government to further improve the airport services and facilities. We will expand our air links by negotiating new air services agreements in addition to the 37 agreements we have already signed, Mr Ip said.

Noting that Hong Kong's primary status as a cargo hub port was derived from our economic relationship with the Mainland, Mr Ip said, "Hong Kong is the Mainland's largest investor and third largest trading partner. Hong Kong will have much to gain from the spurring effect of China's WTO membership on its trade and investment with the rest of the world."

"Hong Kong companies should be able to secure a significant share of the liberalised trade in the Mainland. Our professionals can contribute to the modernisation of China's business and legal systems. More businesses can be derived in accounting, auditing, advertising, computer applications, management system, and finance. Hong Kong companies can capitalise on their well-established business network in the Mainland to help facilitate foreign direct investment inflows into the mainland."

"Hong Kong's role as the gateway to the Mainland of China has become even more important today with the growing international trade and rapid expansion of the Mainland's economy," Mr Ip concluded.