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Speech by STH at a shipping community luncheon in Korea (English only) (with photos)

     The following is the speech by the Secretary for Transport and Housing, Ms Eva Cheng, at a luncheon after a seminar entitled "Maritime Hong Kong - Experts with Worldwide Connections" for the shipping community in Seoul, Korea, today (May 31):
Distinguished Guests, Ladies and Gentlemen,
     Good afternoon. I am honoured to have this opportunity to speak to the leaders of the Korean maritime and related industries. First let me thank you all for coming to the seminar this morning. I hope that the presentations on what Hong Kong can offer have showcased how Hong Kong can be your close partner in the maritime world and help your businesses expand.
     Over the years, Hong Kong and Korea have been active partners in trade. In 2010, bilateral trade grew year on year by 28%, amounting to over US$21 billion. Over 180 Korean firms base their regional headquarters and offices in Hong Kong. Korean brand names have infiltrated every part of Hong Kong life. Samsung and LG are popular choices when we shop for electronic appliances ranging from LED TVs and mobile phones to tablets. Korea is a popular holiday destination for Hong Kong people. And Korean TV drama series, films and pop songs have won extremely faithful following in Hong Kong.  Out of popular demand, some of our channels show Korean drama series during prime time and all your famous actors and actresses now speak fluent Cantonese on TV!
     The Hong Kong and Korean maritime sectors have also developed a close, although not necessarily high profile, relationship. A considerable number of vessels owned by Hong Kong shipowners were Korean made. Each day, there are on average six sailings of container vessels between Hong Kong and Korea. Indeed, both Hong Kong and Korea are considered among the strongest maritime players in Asia. You are the third largest maritime nation in terms of merchant shipping capacity in Asia. You have since 2003 become the world's top shipbuilder and are the home of seven of the top 10 shipbuilders. Hanjin Shipping is amongst the global top 10 container carriers and Busan Port is the world's fifth busiest container port.  These are truly remarkable achievements. Hong Kong also plays an important role in the international shipping scene. Hong Kong shipowners control about 9% of the world's merchant fleet. Our shipping register is now the world's fourth largest in terms of gross tonnage of vessels registered. The Hong Kong Port ranked third in terms of container throughput in 2010.
     In addition to a quick rebound after the financial tsunami in 2008, Korean trade is expected to further expand in tandem with the global economic recovery as well as the increasing demand amongst Asian economies. Your maritime industry is therefore bound for continuous growth and expansion. I believe that Hong Kong is well positioned to be your partner in taking advantage of new opportunities ahead.  It is therefore high time our maritime sectors thought about expanding their partnerships to a new dimension.
     I am saying this with confidence. As a world-class services hub, our full range of first-rate professionals has been serving the needs of maritime industry players and their overseas counterparts for decades. Enhancing Hong Kong's competitiveness as a premier international maritime centre always ranks high on the Hong Kong Government's agenda. This positioning is strongly supported by the Central People's Government (CPG) of the People's Republic of China. In its "Outline of the Twelfth Five-Year Plan for the National Economic and Social Development" newly released in March 2011 to map out the national development strategy for the period of 2011 to 2015, the CPG pledges its unequivocal support for Hong Kong to consolidate and enhance our position as an international shipping centre.
What Hong Kong Can Offer
     Strategically located on the Far East trade routes, Hong Kong has over the years established itself as a renowned maritime centre and trading hub. Our "Big Market, Small Government" philosophy and entrepreneurial attitude have created a transparent, fair and friendly environment for businesses. We have been ranked the world's freest economy for 17 consecutive years by the Heritage Foundation. We, together with the US, were just ranked the most competitive economy by the International Institute for Management Development for the first time. The Basic Law, our mini constitution, has preserved the conditions for our success. Our rule of law is underpinned by an independent judiciary, a clean government, free flow of capital and information, and a freely convertible currency. Our low and simple tax regime - profits tax at 16.5% on Hong Kong-sourced income only - and our status as a financial hub and free port continue to make Hong Kong the best place for business, including the maritime industry. More importantly, we treat all enterprises, local or foreign, equal and there are no strings attached to any investment made.
     Hardware-wise, our natural deep-sea port provides home to our container port, which is one of the busiest worldwide and recorded a throughput of 23.7 million twenty-foot equivalent units in 2010. The Hong Kong Port is served by some 400 sailings per week reaching 480 destinations worldwide. Last year, there were over 210 000 vessel arrivals, of which about 57% were cargo vessels. The round-the-clock operation of the 24 berths at our nine container terminals is one of the most efficient worldwide and is well complemented by auxiliary facilities with deep marine frontage. In anticipation of future growth in cargo volume, we are conducting a preliminary feasibility study on developing a 10th container terminal near the existing ones. We are also undertaking a project to dredge our Kwai Tsing container basin so that we can accommodate the new generation of ultra-large container ships at all tides.
     On the service side, our strong cluster of shipowners has anchored a myriad of maritime and related services in Hong Kong. Today, there are about 700 shipping-related companies calling our city home. A comprehensive range of high quality services in ship management, ship broking, marine insurance, legal services, arbitration, ship finance, ship surveying to ship registration are provided without geographical or time zone limits. Most of these areas have been covered by our speakers this morning.
     Separately, I have earlier mentioned that the Hong Kong Shipping Register is currently the world's fourth largest. Apart from having an impressive gross tonnage, it also has an excellent reputation as a register that maintains a high quality. As at mid-May, the Hong Kong fleet consisted of 1 800 ships with a total gross registered tonnage of some 60 million. Hong Kong-flagged ships have a very low detention rate, just 1.64% in 2010 under the Tokyo Memorandum of Understanding on Port State Control, against a world average of 5.48%. To help reduce the operating cost of ships flying the Hong Kong flag, all carriage income from Hong Kong uplift and proceeding to outside Hong Kong is exempt from Hong Kong profits tax.
     I hope that my delegates and I have successfully taken the opportunity to introduce to you the wide range of quality maritime services in Hong Kong that are at your service and why you should partner with us. I will not go into the details of the individual service areas again suffice to highlight the following aspects: Hong Kong has the legal framework and professional network for arbitrations to be conducted in accordance with international standards. Most of the banks which are active in ship financing have a presence in Hong Kong. We are also home to most of the leading insurers and P&I clubs. According to the International Union of Marine Insurance, marine insurance premiums handled in Hong Kong totalled US$323 million in 2009, which is among the highest in Asian economies. And Hong Kong is one of the regional bases for conducting sale and purchase broking of ships with non-Hong Kong based shipowners in other Asian countries.
Closing Remarks
     With the depth and breadth of our maritime services and our ever improving connectivity, you can rest assured that whether you want to raise capital in Hong Kong for your ships, or find an agency there to manage your ships, or set up shop there to extend your global reach, you will be working with the best-performing teams and enjoying the most efficient transport network for goods and personnel alike. The delegation with me today comprises the movers and shakers of the Hong Kong maritime sector and they are close partners of the HKSAR Government. Why would these busy people, leaders of their own right in the maritime field, take time off their busy schedule and join the Hong Kong Government on this delegation? I would have hoped it is my personal charm but I do have the good sense to know that's not the reason. They are here to give personal testimony as users and providers of our world class maritime service.  I hope that you will get to know them and learn about Hong Kong, their businesses and what Hong Kong can offer. May today's friendly networking be the beginning of rewarding partnerships that make a difference in your smooth sailing in the maritime world.
     Thank you.

Ends/Tuesday, May 31, 2011
Issued at HKT 16:58


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