Shipping challenge

PUBLISHED : Thursday, 23 January, 1997, 12:00am
UPDATED : Thursday, 23 January, 1997, 12:00am

The agreement between China and Taiwan to allow direct cross-straits shipping is very good news on an international level, but presents Hong Kong with a major challenge to its future as a trading hub.

Formal links between the mainland and Taipei for commercial shipping may be the first step toward establishing a better relationship between them. That would be welcomed throughout the region, and the fact that agreement has been reached despite a series of recent political rows shows the vital importance of commercial links.

It had been expected that direct shipping links would come around the time of the transition in Hong Kong. But even if the territory's container industry is not unprepared, it faces the awesome prospect of 90 per cent of current trade between Taiwan and the mainland being diverted from Hong Kong. Last year that amounted to a million 20-foot containers out of a total of just over 13 million handled here. The industry will now have to assess how it is going to make up the gap to use the expanded container facilities. This will mean developing better services, offering more competitive rates, and ensuring the use of state-of-the-art technology.

With his shipping experience, this is a challenge made for the Chief Executive designate to ensure that the SAR has an overall strategy to withstand the switching of trade and remain a world leader.