Hong Kong will remain a major trading centre despite the fact that its role as a re-export hub will be undermined, the Bank of China (BOC) says. In its latest economic quarterly report, the BOC said the percentage of income contributed by re-exports would drop because of the limited space available for port expansion. The loss could be compensated for by growing offshore trade, as Hong Kong companies would adopt a more important role in arranging transactions in other regions, it said. However, goods would be shipped directly to the buyers or take the form of transshipment, which meant they would not go through Hong Kong customs. The bank said: 'The gross profit of offshore trading is lower because it utilises fewer port and storage facilities in Hong Kong. 'But supporting services such as navigation, telecommunications, advertising, marketing, offshore financing and insurance will benefit from the growth of offshore trading.' The report said Hong Kong was facing pressure from the growing number of ports in southern China but mainland ports were yet to become real rivals. 'The Pearl River Delta still lacks a major distribution port and therefore the volume of products handled by these ports cannot support frequent international routes,' it said. It said products from the Pearl River Delta would continue to be redistributed through Hong Kong. Meanwhile, with the growth of Hong Kong's investment in China, its companies would continue to merchandise and market their products in the territory while having their operations in China. This would boost offshore trade. Direct shipment between Taiwan and the mainland would not have significant impact on Hong Kong because only two China ports, Xiamen and Fuzhou, were open to direct shipment. The report also warned that the territory's trading partners should treat Hong Kong and China as two entities and not try to impose the same trade restrictions on Hong Kong after the handover. 'The worries [over trading restrictions] are not without reason, but hopefully the problem can be solved,' the report said.