Strategic plan needed to energize SAR as global shipping center

During Chief Executive John Lee Ka-chiu’s duty visit to Beijing, both President Xi Jinping and Premier Li Keqiang expressed their support for Hong Kong to give full play to its unique advantages, to engage in extensive international cooperation, to better integrate into the overall development of the country, and to consolidate its status as an international financial, trading and shipping hub. In an article written by John Lee after his return to Hong Kong, he mentioned twice the consolidation or enhancement of Hong Kong’s status as an international maritime center as one of his policy priorities.

At a time when the Hong Kong Special Administrative Region government is conducting a public consultation on the 2023-24 Budget, it is timely to formulate a long-term and comprehensive strategic plan for the development of Hong Kong’s maritime industry and allocate resources for its long-term development. Financial Secretary Paul Chan Mo-po also wrote an article stating that a multipronged strategy and measures should be adopted to promote the development of high value-added maritime clusters. 

In this article I discuss the four dimensions of “long-term”, “comprehensive”, “strategic” and “plan”, focusing on how to consolidate and enhance the status of Hong Kong as an international shipping center, with a view to inspiring thoughts.

As the name suggests, a “long-term” plan for an industry requires planning for at least 10 years or even 30 years into the future. As an example of a long-term plan, the preamble to the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area states clearly that the plan will cover the near term to 2022 and the long term to 2035; that is, it is a long-term plan for the development of the Greater Bay Area in the next three to 15 years.

From the long-term perspective of the development of an international shipping center, Hong Kong needs to focus on the future direction of the global shipping industry. For example, the International Maritime Organization has established the target of reducing greenhouse gas emissions from ships to 50 percent of the 2008 level by 2050, while the International Chamber of Shipping to which the author belongs, is promoting the shipping industry to achieve net-zero emissions by 2050. Therefore, decarburization will be an ongoing concern for the global shipping industry in the next 30 years. At the same time, digitalization and intelligent transformation are also key to the sustainable development of shipping. If Hong Kong is to consolidate and enhance its position as an international shipping center, it must plan for a green and digital maritime future.

“Comprehensive” is particularly important while formulating a strategic plan. Many people have the misconception that the shipping industry is just about container terminals and maritime cargo transportation, which is a narrow and incomplete view of the industry. As a future-oriented, leading international shipping center, a rich and diverse maritime cluster is indispensable. The maritime cluster consists of a core of shipowners, ship managers and port operators, surrounded by high-end shipping service providers, including banks and finance leasing companies providing ship financing services, insurers, protection and indemnity clubs and insurance brokers providing various types of marine insurance, ship management and agency companies providing ship management services, shipping brokers providing ship chartering and sale and purchase services, lawyers, arbitrators and experts providing legal and dispute services, as well as media, technology, information, education and other shipping-related enterprises and organizations.

The different segments of the maritime cluster are closely related and inextricably linked. Any strategic plan should be based on the overall perspective of the shipping industry and take into account the development concerns and needs of different stakeholders in the maritime cluster. Take the legal and dispute resolution sector, in which the author is mainly engaged, as an example: Only by attracting more business principals to Hong Kong can we promote more demand for ship financing services, generate more requests for ship management and agency business, and promote more insurance underwriting and claims settlement in Hong Kong, which will ultimately give maritime lawyers and arbitrators a foothold and a place to work in Hong Kong, and attract more young lawyers to join the practice of shipping law.

In the face of the anti-globalization wave, the shipping industry is the most globalized industry, and Hong Kong is the only international shipping center with a common law system in China. Therefore, the strategic plan for the shipping industry should be based on the national strategies of dovetailing with the development of the Greater Bay Area and the Belt and Road Initiative, and be built around promoting the development of maritime clusters in the next 10 to 30 years, with the ultimate goal of giving priority to the needs of the country and contributing to the strengths of Hong Kong.

In formulating the strategic plan, we should address the problem of the community’s lack of understanding of the shipping industry and make the knowledge and insights of the shipping industry clear and easy to understand, so as to enhance the understanding and support of the shipping industry by the whole community, especially the HKSAR government, the financial sector and the professional sector. The strategic plan should accurately define the issues faced by Hong Kong’s shipping industry in future development from a global and national perspective, such as helping to achieve zero carbon emissions in global shipping, maritime intelligence and digitalization, and propose specific measures that Hong Kong can take to overcome these challenges. The strategic plan should set specific targets for both consolidation and enhancement, and focus efforts and resources on a few key objectives which, once achieved, will effectively consolidate and enhance Hong Kong’s position as an international shipping center. In addition, the strategic plan should fully demonstrate the plans and actions, strength and will, vision and capability of the HKSAR government and the industry in developing Hong Kong’s shipping industry.

A good plan requires vision and ambition, as well as targeted and practical strategies and measures. The plan should first establish core values for the development of Hong Kong’s maritime industry in the next 10 to 30 years, such as the uniqueness and advantageous position of “Hong Kong shipping” as a link between China and the global shipping market.

In terms of specific strategies and measures, it may consider focusing on the following areas: (1) attracting commodity traders and ship operators and managers to set up their regional headquarters in Hong Kong, so as to become a globally attractive destination for all maritime businesses; (2) maximizing the competitiveness of high value-added shipping services such as financing, insurance, management and brokerage, and maritime law; (3) combining the strengths of an international financial center with the development of an innovation hub to become a global leader in shipping decarbonization and digital intelligence, and to help the country become a global rule-setter in the shipping industry; (4) nurturing local talent and attracting overseas professionals, and becoming an education and training base for talent from the Chinese mainland and Southeast Asian countries for high-end shipping services; (5) showcasing Hong Kong’s and the mainland’s strengths in port, transport, engineering and high-end shipping services to the world through the Hong Kong Maritime Week and other maritime branding activities to foster the comprehensive and diversified development of the maritime cluster; (6) helping the country strengthen its relations and cooperation with the International Maritime Organization, the International Labour Organization and other international shipping non-governmental organizations to support and promote globalization and free trade.

The author is principal representative of the International Chamber of Shipping (China) Liaison Office, and a co-opted member of the Hong Kong Maritime and Port Board.

The views do not necessarily reflect those of China Daily.