How US-China trade war can inspire Hong Kong shipping to chart a new course

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The fall in demand for shipping services amid the US-China trade war is expected to hit Hong Kong hard. The question is whether Hong Kong should passively absorb the impact of the trade war, or act upon the opportunities that exist amid the crisis. Photo: Roy Issa

Published: 5:18pm, 25 Jul 2018Updated: 10:40pm, 25 Jul 2018

As the China-US trade war continues to escalate, collateral damage to Hong Kong – an export-oriented economy with China and the US as its largest trading partners – is inevitable.

As the shipping market is closely tied to trade, the trade war may also influence Hong Kong’s logistics and trade industries. In light of such events, it is worth exploring whether Hong Kong should passively absorb the impact of the trade war, or act upon the opportunities that exist amid the crisis.

Most significantly, freight traffic on the transpacific route between Asia and the west coast of North America – in which Hong Kong is the most important entrepôt – is likely to suffer, as a result of falling demand for shipping services. Since the trade war began, shipping alliances such as 2M and THE have announced a reduction in transpacific services.

As China and the US account for a majority of Hong Kong’s imports and exports, a reduced number of sailings will place further downward pressure on port cargo throughput.

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Crisis, however, can come with opportunities. To counteract the detrimental effects of the trade war, the Hong Kong government and the industry may be forced to develop long-term strategies and measures to develop high value-added shipping services, such as ship registration and management, maritime insurance, and shipping arbitration and legal services.