HK losing bid to be maritime centre

More foreign shipowners and maritime-related companies should be encouraged to come to Hong Kong if the territory is to develop as an international shipping hub, says the new chairman of the Hong Kong Shipowners Association.

But such an effort would require a high-level, policy-driven approach from the government and close co-operation between the public and private sectors, Alan Tung Lieh-sing said in a recent interview.

Tung made his comments as concern grows that Hong Kong is losing ground to Shanghai, and especially Singapore, as the destination of choice for the overseas shipping industry including owners, charterers, maritime law firms and ship finance banks.

Without mentioning the regional rivals by name, Tung said 'it would be a pity to cede the accomplishment thus far to competing locations'.

But one Hong Kong shipping executive, who asked not to be named, was more specific.

'Using a nucleus of ship owners and ship managers, Singapore has succeeded in creating a maritime cluster that is already difficult to compete with and will only strengthen over time,' he said. While Hong Kong had benefited from its strong mainland links, 'not everyone wants to be close to China. Singapore is seen as more international in outlook'.

The executive added that while iron-ore miner Vale listed in Hong Kong a year ago, its massive fleet of 19 very large ore carriers being built in China and South Korea will be registered in Singapore. Citing other examples, he said Citic Pacific had set up an entire shipping department in Singapore rather than Hong Kong to oversee the operation of its fleet of bulk carriers that will carry magnetite ore from Australia to China. Rival miner Rio Tinto had also established shipping operations in Singapore.

'Singapore is now attracting charterers and cargo owners which made it easier for everybody - ship owners and operators, shipbrokers and lawyers - to get closer to their customers,' the executive said. 'Of course, the Singapore government offers financial incentives to shipping and maritime-related firms to set up there, which is something Hong Kong government will never do. But the more companies move there, the more others will be attracted as the maritime cluster grows.'

Tung, who is also a director of the privately owned Tung family shipping company, Island Navigation Corporation International, said the Hong Kong government had concentrated on developing Hong Kong's shipping register as its main contribution to the maritime sector.

'I think it is important for the government to move past the registry focus and facilitate a business environment in attracting service activities as well as owning, operating and management activities,' Tung said.

'More importantly, there is room for further growth,' Tung added, pointing out that 3 per cent of the global merchant fleet was owned, controlled or managed from Hong Kong last year, according to figures from the United Nations Conference on Trade and Development. This put Hong Kong eighth among the ship-owning jurisdictions of the world.

Tung pointed out that China and Japan have almost doubled their merchant fleets in the past 15 years.

'Given Hong Kong's unique positioning and the specific conditions within China and Japan, there is a distinct possibility for Hong Kong to become home to more owner and operator activities,' he said.

'This effort, however, will take close co-operation between the private and public sector, a high-level, policy-driven approach from government, and consistent follow-up by government.'

Tung said the appointment of a dedicated shipping minister might be a long-term goal. But he agreed it would be useful in the short-term for the shipping industry to have a single point of contact that could deal with issues affecting the maritime community.

The idea of a troubleshooter was put forward last week by Peter Cremers, who was HKSOA chairman in 2008 and 2009.

'I have always held the view that what we need is indeed one point of contact familiar with the business requirements of a specific sector who co-ordinates among the various departments,' he said. 'Not only shipping but other industries suffer from the iron curtains between government departments'.

Industry executives generally agree that the government has failed to tackle at least four thorny issues affecting the shipping and port industry. These include the lack of double taxation agreements between Hong Kong and other jurisdictions; immigration problems with seamen who stay in Hong Kong longer than 14 days; a need for greater liberalisation of cross-boundary trucking services, and providing additional back-up land for container storage.