New | Hong Kong red tape puts China e-commerce hub prospects at risk, says DHL
DHL warns city’s edge over free-trade zones may erode if export processes not streamlined
Hong Kong needs to do more to reduce red tape if it hopes to remain a leading gateway to China’s booming e-commerce market, according to DHL Global Forwarding’s Asia-Pacific chief executive, Kelvin Leung.
“To avoid being marginalised, Hong Kong needs to make efforts to streamline its customs and inspection processes for goods being imported by mainland China,” Leung said. “Work such as food safety checks and the submission of forms is still duplicated in Hong Kong and on the mainland.”
China is now the world’s largest e-commerce market, with transaction volume totalling 16.39 trillion yuan last year, up nearly 60 per cent on 2013. The emergence of free-trade zones, with more favourable tax and clearance policies, is stimulating the trade, and more logistics providers are turning to zones such as Qianhai, in Shenzhen, as transit depots.
However, Leung said Hong Kong still had unique advantages compared to free-trade zones.
“Hong Kong has a better integration of its seaport and airport, and the airport here has many more connections to overseas,” he said, while adding that the links between Hong Kong and Qianhai could be better when it came to customs clearance and the exchange of electronic data.
The fast-growing e-commerce sector is changing the landscape of the whole logistics industry, with DHL Global Forwarding finding the biggest difference is the need for more communication with local authorities on the mainland to clarify clearance processes for different types of imports.
“Unlike traditional channels, for example, now 1,000 individuals may together purchase 1,000 packages,” Leung said. “Will customs treat them as individual purchases or one shipment? It should be negotiated.
“The rules and processes are getting much clearer in free-trade zones, but a lot of discussions are still going on because technology is developing much faster than regulations. What we hope most is that governments can listen to the needs of trade counterparties more frequently, and be more open-minded in updates to tax and inspection regimes.”
He said DHL Global Forwarding sometimes had to wait for months for the authorities to approve new requirements.
The logistics giant foresees continued, strong growth of e-commerce on the mainland, driven by younger consumers.
“Our goal is to further expand into China’s tier-three and tier-four cities and deepen local partnerships with e-commerce giants like Alibaba and JD.com,” Leung said.
