Speech by STH at seminar in Ho Chi Minh City, Vietnam (English only) (with photos)
**********************************************************************************
Distinguished guests, ladies and gentlemen,
Xin chào. Good afternoon. I am very happy to be here today to share with you some of our thoughts on how we could further collaborate in trade and logistics services.
It will be Christmas in less than two weeks. Some of us may well remember that as a small kid we waited in joyful anticipation of Santa Claus' delivery. We have long outgrown Santa, of course, but Santa is no doubt an icon of inspiration for those in the logistics industry and in supply chain management. Even if you don't celebrate Christmas, you will surely envy Santa's supply chain.
Let's take a look at Santa's operation from a logistics point of view: we are supposedly talking about delivering Christmas presents for hundreds of millions of children across the globe within a single day. Santa's night of gift-delivering could easily become the largest logistics operation in the world. The real-world rival to Santa today may probably be Alibaba on the Singles' Day of 11 November - this year the delivery orders placed numbered 650 million, costing US$17.8 billion, up 32 per cent from 2015.
Back to Santa, his challenges are no different from what faces logistics services providers every day - he needs to accurately predict the time of arrival, manage real-time disruptions, track and trace consignment status, and ensure that the last miles are cleared efficiently.
The less complicated part for Santa is that there is no reverse logistics - we rarely hear children sending their presents back to Santa.
Santa also has a remarkable feat in inventory management. Since Santa has such a solid reputation of delivering the goods right, there is no carryover inventory on the 26th of December. This means no inventory distortion - no overstocks and no out-of-stocks.
Santa represents an ideal world, as a fairy should do. However, logistics services providers today should still aspire to get close to the high bar set by Santa. This requires collaboration across borders and boundaries, and multi-modal transportation links. Lone efforts are always more difficult. Here lies the case for closer collaboration between Hong Kong and Vietnam. I believe we can bring much more to each other's tables.
The logistics industry in Vietnam has been growing rapidly in recent years with the continued inflow of foreign direct investment. In the past decade, we note Vietnam's container port throughput has been expanding at a very impressive annual growth rate of 13.8 per cent, reaching 10.6 million TEUs (20-foot equivalent units) in 2015. That aside, the aviation front has also gained a strong growth, with the total air exports doubling over the last five years. I understand the Vietnamese Government is planning to upgrade the country's airport infrastructure, meaning that the need for logistics services catering for higher-value air cargo will be on the rise.
Hong Kong, on the other hand, has for over a century excelled as a trading economy with a strong trading and logistics sector, which accounts for 23 per cent of Hong Kong's Gross Domestic Product (GDP) and 20 per cent of employment. Together we are a perfect match, as Hong Kong logistics services providers can offer Vietnamese companies and producers customised logistics solutions targeting, in particular, air cargo in order to better reach out to the growing consumer markets both in Hong Kong and the Mainland of China. That's why we are here today, to talk business, and in particular business in the logistics sector.
In fact, Hong Kong and Vietnam have already been close partners in trade for decades. We have very close trade ties with each other. Last year, Vietnam was Hong Kong's ninth largest trading partner. Reciprocally, Hong Kong was Vietnam's ninth largest trading partner and fifth largest export market. There has been a marked annual growth of 21.2 per cent in trade value between Vietnam and Hong Kong from 2010 to 2015, reaching US$16.5 billion in 2015. Such significant growth is attributable to the increase in air cargo, with its average annual growth rate reaching over 20 per cent.
Furthermore, China is one of Vietnam's largest export markets and Hong Kong plays an important role in the trade between Vietnam and Mainland China. In 2015, 9.3 per cent of the total trade between Vietnam and the Mainland was routed through Hong Kong. In absolute value, we are talking about US$8.9 billion worth of goods.
The laden container throughput between Hong Kong and Vietnam totalled 950 000 TEUs in 2015. Of this, more than one-fifth were trans-shipment relating to the Vietnam-Mainland China trade.
The air cargo throughput between Hong Kong and Vietnam totalled 100 000 tonnes in 2015, of which more than half were trans-shipment cargo.
Goods to the Mainland are routed through Hong Kong for good reasons. Strategically located at the heart of Asia, Hong Kong has long been the gateway to southern China, and the bridge between the Mainland and the rest of the world. Our infrastructure is rated number one in the world by the World Economic Forum's Global Competitiveness Report. Our robust economy, trade freedom, regulatory efficiency and excellent logistics services have made Hong Kong a premier logistics hub.
The Hong Kong Port is a natural deep seaport and one of the most efficient ports in the world, with an annual throughput of more than 20 million TEUs. About 340 container vessel sailings leave Hong Kong every week to some 470 destinations worldwide.
The depth of our container port and approach channel is being dredged to 17.5 metres. With dredging works close to completion, the Hong Kong Port will be able to receive mega container vessels at any time of the year regardless of tides.
Hong Kong can reach all of Asia's major markets within four hours' flight time and half of the world's population within just five. The Hong Kong International Airport hosts more than 100 airlines, operating over 1 100 flights each day to 190 international destinations, including some 45 in the Mainland of China. Our airport has been the busiest cargo airport in the world since 2010, handling over 4.38 million tonnes of cargo last year.
And we are expanding into an even better aviation hub, having moved ahead with a three-runway system. Works have started and when completed in around 2024, our airport will have the capacity to handle about 100 million passengers and 9 million tonnes of cargo a year.
Hong Kong has a comprehensive high-speed road network with well-connected cross-boundary points (there are five of them, including one under construction) that link up the container terminals, airport and various logistics nodes, providing excellent connectivity with Mainland China, in particular the Pearl River Delta (PRD), one of China's fastest growing regions, contributing to about 9 per cent of the Mainland's GDP. The PRD is also a booming consumer market, taking up some 7 per cent of total retail sales in the Mainland.
Hong Kong values its affinity with the PRD region and attaches great importance to expanding connectivity with the newly booming Western PRD. We are getting near to the completion of the Hong Kong-Zhuhai-Macao Bridge - this mega-project is funded, constructed and to be operated by Hong Kong, Macao and the Guangdong Province of China. Upon commissioning of the Bridge, a journey from the Hong Kong International Airport to Zhuhai city in the Pearl River Delta region will be compacted from over four hours to about 45 minutes. With this addition to our multi-modal transport network, cargo arriving Hong Kong by air can be speedily transported to the western part of the Pearl River Delta region.
Ladies and gentlemen, it is true that we have an uncertain economic outlook ahead, but Asia remains the engine of the global economy. According to International Monetary Fund's forecast, the Asia-Pacific region remains the most dynamic region of the global economy. The economic growth of the Asia-Pacific region is estimated to be about 5.4 per cent during 2016-17, as compared to around 3.2 per cent globally. The economic scene is still in Asia's favour. To illustrate, nine of the top 10 container ports in the world are in Asia, of which seven are in China, including Hong Kong.
Hong Kong takes pride in being the "super-connector" between the Mainland and the rest of the world. In logistics, Hong Kong cherishes its strength in connectivity, customer-convenience, and cost-efficiency. Hong Kong is geared towards playing an important role in China's Belt and Road Initiative, and we stand ready to work with Vietnamese companies to take advantage of the immense opportunities expected to come about under that Initiative.
New trade routes will emerge amongst the 60-plus economies along the Belt and Road corridors. The Hong Kong Port has marine cargo movements with 45 of these economies. We have also signed air services agreements or international air transit agreements with over 40 of them. This certainly gives Hong Kong a clear edge in meeting the increasing need for logistics services in the Belt and Road regions, particularly in emerging economies where high-quality logistics services are in high demand.
Joining me here today are members of the Hong Kong Logistics Development Council, representatives of the Hong Kong Trade Development Council, as well as key players of the logistics trade from Hong Kong. They are the real movers and shakers who know our logistics industry inside out, who can share with you their insights on and experiences of doing business with Mainland China, including the advantages of routing your goods through Hong Kong. The Hong Kong Economic and Trade Office based in Singapore also stands ready to provide you with more information about doing business in Hong Kong, and to help you connect with relevant offices and people.
Lastly, I would like to thank everyone who takes the time to come to this seminar today, to give us an opportunity to share with you how we can strengthen our friendship and partnership. I am confident that our two economies can work closer to achieve mutual benefits and prosperity in the years ahead. On this note, may I wish you and your family a prosperous and good year of 2017. Thank you.
Ends/Wednesday, December 14, 2016
Issued at HKT 15:21
Issued at HKT 15:21
NNNN
Photo
