28 December 1999 (Tuesday)

Shipowners of Hong Kong registered ships will be paying lower port charges when their ships call at ports in the Mainland of China from 28 January 2000, the Secretary for Economic Services, Mr Stephen Ip, said today (Tuesday).

Speaking after the signing ceremony for a Memorandum of Understanding (MOU) on port dues with the Minister of Communications, Mr Huang Zhendong, who is currently visiting Hong Kong, Mr Ip said this marked another big step forward towards making the Hong Kong Shipping Register more competitive.

The MOU stipulates that Hong Kong registered ships calling at Mainland ports will be entitled to preferential rates for port dues.

To promote the development of the shipping industry in the Mainland and Hong Kong, Mr Ip said the Economic Services Bureau had completed discussions with the Ministry of Communications on port charges.

He said, "Both parties agreed that in the wake of continuous economic growth of Mainland China and the stable Hong Kong economy, shipping trade between ports in the Mainland and Hong Kong were growing steadily and arrangements to boost trade such as this agreement on port dues will further accelerate growth. In order to sharpen our competitive edge in the international shipping market, it was agreed that Hong Kong registered ships should be entitled to preferential rates."

Citing as an example, Mr Ip said a Hong Kong registered ship with a net registered tonnage of 50,000 tonnes could now save about 60,000 Hong Kong dollars when it called at a Mainland port - a 30 per cent saving in port dues.

Mr Ip said, "We will spare no effort in promoting the Hong Kong Shipping Register. In April this year, we instituted a package of measures to make the Register more competitive and friendly. These covered a substantial reduction in the cost of registration and simplified registration procedures while maintaining the highest standard."

Mr Ip noted that another important factor affecting shipowners' choice of a shipping register is tax considerations. Hong Kong had already entered into an agreement on double taxation arrangements with Mainland China in February 1998. The agreement benefits owners of ships registered in Hong Kong as they are exempted from paying tax levied on cargo uplifted in Mainland ports and vice versa. "Earlier this month, we have initialled an avoidance of double taxation arrangement on shipping with the Netherlands. Other countries that we have similar arrangements are the U.S., New Zealand and Korea. We are also having discussions with about 20 other tax administrations, including Belgium, Denmark, the U.K. and Germany," he said.

Mr Ip said, "We are now steadily attracting top quality tonnage to our shipping register. The registered tonnage has increased about 30 per cent since the new measures to improve the Register took effect in April. A two million tonnage increase over a period of eight months against a base of 6.36 million GRT (Gross Registered Tonnes) is a very impressive rate of growth. I am confident that more shipowners will consider registering their ships in Hong Kong, which in turn will further strengthen our standing as an international shipping centre."

To ensure more shipowners and shipping lines understand the commercial and operational benefits of registering with the Hong Kong Registry, Mr Ip will lead a delegation of Hong Kong Port and Maritime Board members to visit Japan and Korea in January 2000 to promote the register to Japanese and Korean shipowners and shipping lines.