In mid-April, shipping research organization Alphaliner published the rankings of the world’s 30 busiest ports, and the results have left Hong Kong’s maritime community on edge. Handling 14.3 million TEUs (20-foot equivalent units) in 2023, Hong Kong was ranked 11th globally, slipping one place from the previous year. Is Hong Kong’s position as a preeminent international shipping hub no longer secure?
When assessing a city’s standing as a global shipping hub, the common tendency is to focus solely on container throughput numbers. However, this narrow lens fails to capture the true breadth and depth of the shipping industry value chain that encompasses a highly diversified array of services, from traditional areas of terminal operations and shipping to more specialized fields like shipbroking, ship management, ship registration, strategic consulting, legal services, and maritime arbitration. All these components play a vital role in a maritime hub’s overall capabilities and competitiveness.
Despite facing external headwinds, Hong Kong’s maritime industry has maintained a solid foundation when the sector’s full breadth is considered. According to the latest Xinhua Baltic International Shipping Centre Development Index Report, Hong Kong ranks fourth worldwide as a premier shipping hub, trailing only the global shipping powerhouses of Singapore, London, and Shanghai. What sets this report apart from other industry rankings is its holistic assessment, of a city’s entire shipping ecosystem. In this regard, Hong Kong boasts a vibrant community of around 100 ship management companies, 20 shipbrokers, and 400 law firm partners specializing in maritime law. The sheer number of companies and professionals is a testament to Hong Kong’s prominent position in the shipping service industry.
Hong Kong’s position in maritime arbitration is particularly irreplaceable within the industry across continents. In 2020, Hong Kong was listed by the Baltic and International Maritime Council as one of the four designated arbitration venues, on par with London, New York and Singapore. In large part, Hong Kong is one of the international maritime arbitration centers thanks to its alignment with international law and unique institutional advantages under the “one country, two systems” framework. In 2019, Hong Kong and the Chinese mainland reached the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the HKSAR (Interim Measures Arrangement), a landmark arrangement that allows parties to arbitration proceedings conducted by qualified arbitration institutions in Hong Kong to apply to mainland courts for interim measures to preserve the property of the respondent in the mainland, hence protecting claimant’s interests. The Interim Measures Arrangement means that Hong Kong has officially become the only jurisdiction outside the mainland that can enforce arbitration outcomes in the mainland, an advantage unparalleled by the other leading shipping hubs such as Singapore and London.
In addition, Hong Kong has also made significant achievements in developing maritime finance. According to the Hong Kong Monetary Authority figures last June, the total amount of shipping loans and advances exceeded HK$80 billion ($10.25 billion). Many of the world’s largest shipping lenders, such as the Export-Import Bank of China and Societe Generale, have established business operations in Hong Kong. In addition to traditional shipping finance, the city has developed a highly diversified and vibrant alternative financing landscape, comprising a swathe of private equity and hedge funds to supplement the gaps left by conventional shipping finance. Although London still dominates the global maritime finance scene, Hong Kong’s robust banking system and its diversified financing channels show that it has the potential to further develop into an international maritime finance center.
Granted, Hong Kong’s container terminal business may have faced some challenges in recent years, however, the port of Hong Kong has always been renowned for providing efficient service at unmatched speed. A UN Trade and Development report shows that Hong Kong’s container terminals are still the world’s most efficient, achieving the fastest container handling speeds — a crucial differentiator for Hong Kong that has long cemented its status as the catch-up port of choice, especially during periods of heightened geopolitical tension that lead to increasingly volatile shipping schedules. A vessel is often rerouted to Hong Kong for transhipment whenever it faces delays, allowing it to catch up with the schedule.
Despite the adversity it has faced in recent years, Hong Kong has already laid the groundwork for future success in various facets of the maritime industry. Looking ahead, Hong Kong should focus on further consolidating its position as a premier shipping hub by exploring new avenues for diversification and value-addition. To this end, Hong Kong should cultivate talents in the fields of law, finance, insurance, and consulting to set up business in Hong Kong to strengthen our advantage in these high-value-added services. Hong Kong should also look beyond its borders and embrace the potential of the Guangdong-Hong Kong-Macao Greater Bay Area port cluster. Through an enhanced and expanded regional collaboration with neighboring ports, particularly Shenzhen and Guangzhou, Hong Kong can harness the power of regional synergy and diversify its maritime service offerings to cement its status as a leading global shipping hub and capitalize on the vast opportunities that lie ahead.
Ryan Ip is vice-president and co-head of research of Our Hong Kong Foundation. Jason Leung is head of land and housing research, and Alvin Chiu is an assistant researcher of the foundation.
The views do not necessarily reflect those of China Daily.
