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Following is a speech delivered by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, at the seminar on "Hong Kong as Regional Logistics Hub-The Best Link in Your Global Supply Chain" in Florence today (June 12, Florence time):
Distinguished Guests, Ladies and Gentlemen,
Good evening. It gives me great pleasure to visit the beautiful city of Florence again. I told the Minister (the Minister for Infrastructure and Transports of Tuscany Region, Italy, Mr Vincenzo Ceccarelli) earlier this afternoon that Florence was one of my first few foreign cities that I visited when I was a university student several decades ago. Florence has a rich cultural heritage which has attracted hundreds of thousands of tourists from around the world every year, including people from Hong Kong. Its food, wines, and many products are among the best in the world.
At the outset of this seminar, let me thank the organisers first. The seminar is co-organised by several organisations: the Hong Kong Economic and Trade Office in Brussels which looks after the whole of the European Union, Invest Hong Kong which is the promotion arm of Hong Kong, Hong Kong Trade Development Council, Toscana Promozione, Confindustria Toscana, and Confindustria Firenze. I would also like to take time here to introduce Hong Kong to you and say a few words about how Hong Kong can provide the bridge for Italy to bring its quality goods to Asia, in particular the Mainland of China, which is the world's number one consumer market, and the second largest economy.
First and foremost, Hong Kong is blessed with a strategic location at the heart of the Asia Pacific region. From Hong Kong, you can reach all major Asian economies within four hours' flight time and half of the world's population within five hours of flight.
The Hong Kong International Airport is the world's busiest international air cargo hub. Last year, it handled four million tonnes of cargo, over 40 per cent of which were re-exports to or from China and other cities in Asia. Shippers have long made use of our airport to carry cargoes on Asian routes, or on long-haul European flights because of our efficiency, reliability and superb connectivity. In Hong Kong, we have over 100 airlines operating some 7,000 flights every week to about 170 destinations worldwide, including 50 destinations in China. We are now planning for the Third Runway which will increase runway capacity by 50 per cent, to cope with the ever-increasing passenger and cargo demand.
On the maritime side, the Hong Kong Port is served by about 410 containership sailings to some 520 destinations every week. It was the third busiest container port globally in 2012. In addition, Hong Kong is well-connected to the southern part of China by at least four land crossings and a mega bridge that is being built to connect Hong Kong, Macau and Zhuhai city in South China. This bridge will open in 2016.
We are right at the doorstep of one of the world's fastest expanding economies, China. Reunited with China in July 1997, Hong Kong has kept its own distinct systems in law, finance, and customs control. We continue to be the world's freest economy, supported by a simple tax system and low tax rates, free flow of capital, people and information, a clean government, and the entrenched rule of law. We are well versed in international business protocols, and are a key member of the international trading community, with an active role in APEC. The ratio of our trade value to GDP is as high as 360 per cent, the highest among the world's major economies.
Given our geographical proximity, language and ethnicity links, we are familiar with the China market, including the institutional systems there, as well as their way of doing business. This unique blend of expertise accumulated over the decades is most valuable and cannot be found elsewhere. This is what makes Hong Kong the preferred gateway to China for thousands of overseas companies which would like to gain a share in the growing China market. Hong Kong's excellent connectivity to both China and the international community enables it to enjoy the advantage from both "worlds", if you like.
Over the past ten years, China's per capita GDP has increased more than four times. In the same period, the retail sales of China have increased five-fold from US$634 billion to US$3,282 billion. In 2012 alone, the luxury goods market in China had grown by six per cent. Indeed, China is forecasted to be the world's biggest luxury goods market by 2020. Hong Kong, as ever, is in the best position to serve the growing consumption markets in China. Today, about 20 per cent of China's total international merchandise trade is routed through Hong Kong. Hong Kong continues to be the largest external investor in the mainland of China.
Hong Kong is outstanding in this part of the world for its reliable security, quality assurance and intellectual property protection. These attributes have made Hong Kong an ideal place for distribution of high-value products and brand-name goods, from aviation parts to high fashion, from jewellery items to luxury luggage pieces. Brands like LVMH, Burberry, Tiffany, A&F, Philips, Canon have set up their regional bases in Hong Kong to manage their supply chains in Asia. Our free port status is unrivalled in Asia, and is most favourable to the inventory management of high value goods which may require frequent imports and exports to replenish stocks and to meet sales orders by different retail outlets across the region. Our highly efficient customs clearance is another important advantage to facilitate "just-in-time" delivery of cargo.
Our logistics service providers stand ready to offer supply chain solutions to meet your tailored needs, ranging from pick and pack, labelling, return and repair, to any specific requirements that you may have for your goods.
Since the exemption of wine duty in February 2008, advanced wine storage facilities have sprouted in Hong Kong to meet the surging demand. Today, Hong Kong is not only the regional wine hub for trading and distribution, but is also the world's largest wine auction centre.
Another unique advantage of Hong Kong that I must mention here is the Closer Economic Partnership Arrangement with Mainland China, or CEPA for short. It is, in essence, a free-trade arrangement, which provides for zero tariffs for goods of Hong Kong origin to import into China. It also gives Hong Kong service providers preferential access in 48 service areas, including logistics. CEPA is "nationality neutral", which means Italian firms can benefit from it by setting up offices in Hong Kong or partnering with Hong Kong companies. One Italian-based global logistics company, which specialises in serving the high-street fashion industry, has already established its regional headquarters in Hong Kong for the Asia-Pacific region.
In January this year, Hong Kong signed a comprehensive agreement with Italy for the avoidance of double taxation, which will facilitate our bilateral trade further.
Ladies and gentlemen, before I pass the floor to two experts from our logistics industry to give you first-hand experience of doing business in Hong Kong and ChinaˇVnamely Mr David Kuk, Managing Director, DCH Logistics Company Ltd., and Ms Anna Lin, Chief Executive of GS1 Hong Kong, let me extend a warm invitation to you all to the Third Asian Logistics and Maritime Conference to be held in Hong Kong on November 7 this year. We started the first conference two years ago and we held the second conference last year. I think it's also in November. The last conference was very well attended by some 1,300 participants from over 20 countries and jurisdictions, including delegates from China. This time for the third conference in November this year, we expect over 1,400 guests to come. This event will be the mega event of logistics in Asia so I'll urge you all to make your way to this conference because the conference will provide more information about logistics landscape of Hong Kong and the wider Asian region. It will also provide a lot of opportunities for networking and for the exploration of potential business opportunities. If you have any questions, please contact our Economic and Trade Office. We look forward to meeting you again at the November conference in Hong Kong.
Thank you.
Ends/Thursday, June 13, 2013
Issued at HKT 01:36
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