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Speech by CE at Asian Logistics and Maritime Conference (English only) (with video)

     Following is the speech by the Chief Executive, Mr C Y Leung, at the Asian Logistics and Maritime Conference this morning (November 7):

Fred (Lam), distinguished guests, ladies and gentlemen,

     Good morning.

     A very warm welcome to you all at the third Asian Logistics and Maritime Conference. Congratulations to the Hong Kong Trade Development Council on organising this event together with the HKSAR Government.

     I am delighted that we have so many professionals from around the world at this event to discuss the challenges and opportunities for the logistics and maritime sectors.

     Hong Kong has a long history of being China's entrepot, and therefore its logistics and maritime hub. For the best part of the 19th and 20th centuries we were the centre of trade between China and South-east Asia. Now of course we serve the whole world. Our long-standing status as a "free port" means we are able to do business with all economic partners around the globe within a very liberal policy context. We have a sophisticated financial system, robust rule of law and our common law system is underpinned by an independent judiciary.

     Taken together, these qualities provide favourable conditions for expanding our professional maritime services including shipping management, finance, marine insurance, legal services and arbitration services. And because Hong Kong is an international business hub, we also connect the Mainland of China and the rest of the world.

     Two months ago, I led a large business delegation from Hong Kong to Chongqing. Some of the delegates from Hong Kong represented foreign chambers of commerce in Hong Kong. Chongqing is one of the largest cities in southwest China. Flight time from Hong Kong is about two hours. It is an excellent example that highlights cross-boundary opportunities for Hong Kong-based logistics and maritime companies. In the past, all goods heading for overseas markets from Chongqing had to be shipped via ports on the east coast of China such as Tianjin, Guangzhou and Shanghai.  Today, freight from Chongqing takes a shorter route via the Chongqing-Xinjiang-Europe International Railway. This rail link between Chongqing and Germany started operation in 2011. Travel time is about 16 days, which is less than half the time it takes for ocean going cargo. Co-operation in the logistics sector was actually raised by the Chongqing Government.

     Hong Kong already has close business links with Chongqing. In the first half of this year, the value of our import and export trade was about US$2 billion, which is a four-fold (400 per cent) increase compared to the same period last year. Hong Kong's logistics industry is fully developed with a great deal of expertise and experience to offer, not only to Chongqing, but equally to other cities of Mainland in China.

     For the entire 35 years of China's economic reform, many overseas banks, trading houses and professional firms have been using Hong Kong as the base for their China operations. Hong Kong has open borders and equally open minds. China is a huge market. We have been sharing with our overseas business partners the combined advantages of both "One Country" and "Two Systems". Now we are welcoming more logistics companies to Hong Kong. The growth of overseas logistics business will enhance our city's role as a super-connector linking the Mainland of China and the rest of the world.
     Today, over 600 international transport and transport-related companies have set up regional headquarters or regional offices in Hong Kong. Hong Kong's shipowners own and manage 10 per cent of the world's merchant fleet in terms of deadweight tonnage. In addition, 7.7 per cent of the world fleet in gross tonnage terms fly the HKSAR flag, making the Hong Kong Shipping Register the Number 4 register world-wide.

     Intra-Asia trade, which has been expanding on the back of strong domestic demand, is expected to grow further as the formation of the ASEAN economic community takes shape in the next few years.

     Here in Hong Kong we are preparing to negotiate a Free Trade Agreement (FTA) with the 10-member ASEAN bloc. The Hong Kong-ASEAN FTA will help to strengthen trade and logistics in our region and add to the competitiveness and efficiency of our supply chains.

     ASEAN represents important opportunities for investors to connect with some of the world's most dynamic emerging economies. Massive public sector infrastructure programmes in countries such as Thailand and new markets such as Myanmar and Cambodia present exciting opportunities for the logistics and maritime sectors.

     Closer to home, we have the Hong Kong-Zhuhai-Macao Bridge which is scheduled for opening in 2016. Spanning over 40 kilometres, it will be the world's longest bridge-tunnel sea crossing. This megabridge will expand Hong Kong's cargo hinterland deep into the Western Pearl River Delta - the fastest growing region in southern China - and bring it within a reachable three-hour commuting radius of Hong Kong. Also by 2016, our container port basin and its approach channels will have been deepened to receive ultra-large container ships at all tides.

     We are also working to enhance efficiency at our container terminals and identify land for the development of third-party logistics service clusters. As neighbouring ports become more efficient, Hong Kong's logistics and maritime sectors must move up the value chain, and we are gearing ourselves for this new challenge.

     A recent survey by the Hong Kong Trade Development Council identified Hong Kong's strength in high-value logistics. We look forward to responding to growing demand in this region for high-end consumer products ranging from luxury goods to gourmet food.

     Rapidly expanding e-commerce and e-tailing in the Asia-Pacific region also presents huge market potential for logistics service providers that are able to respond to new consumption and supply chain trends.
     Hong Kong's seaport and airport are already among the busiest in the world. To cope with anticipated demand, the Hong Kong Airport Authority is planning for a third runway at the airport. This project will expand the airport's capacity to handle over 600 000 flight movements a year by 2030 and double the current amount of cargo and passenger traffic.

     Apart from upgrading physical infrastructure, we are also scaling up efforts to groom more talent with various expertise to help support the growth of our maritime services sector. The Government has recently earmarked funding to set up a $100-million maritime and aviation training fund. The Fund will sustain and expand existing training and scholarship schemes and support the implementation of new initiatives, through the tripartite efforts of the government, industry and education and training institutions.

     To raise awareness of the opportunities in the industry, we have organised a Logistics and Maritime Week in parallel with this Conference. It includes a series of industry-related seminars and events and offers excellent networking opportunities.

     At the same time, we will soon be completing a consultancy study on enhancing Hong Kong's role as an international maritime centre. The findings of the study will enable us to formulate a strategy and roadmap for expanding our maritime services cluster.

     To upgrade and expand Hong Kong's logistics services and to strengthen our city's role as a regional distribution centre and port hub, we will continue to enhance our transport infrastructure. Our focus is to ensure that Hong Kong retains its competitive edge in multi-modal connectivity in air, land and sea.

     In terms of "soft" infrastructure, we enjoy preferential access to the vast Mainland market under our unique cross-boundary free trade pact called the Mainland and Hong Kong Closer Economic Partnership Arrangement, or CEPA. CEPA gives a first-mover advantage to Hong Kong logistics service providers to enter the Mainland market.

     CEPA is nationality-neutral, which means that foreign companies incorporated in Hong Kong can enjoy the full benefits of CEPA. As the Mainland of China continues to develop as a major shipping power, Hong Kong's mature maritime cluster will have new opportunities to develop closer co-operation with the Mainland shipping industry.

     Ladies and gentlemen, today's conference aims to facilitate the sharing of new ideas and perspectives for the logistics and maritime sectors. With the presence of so many renowned industry professionals, we look forward to hearing your views on how best to develop supply chains to meet the needs and maximise the potential of our region.
     I wish you all a very successful Asian Logistics and Maritime Conference and our visitors a wonderful stay with us in Hong Kong.

     Thank you.

Ends/Thursday, November 7, 2013
Issued at HKT 11:31


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