The status of an international shipping center is determined not by cargo volume but by the scale of the maritime services sector.

Despite the fact that London has disappeared from the list of the world’s busiest ports, and Canary Wharf — once the world’s most active dock — has been converted into a state-of-the-art commercial district, London remains the foremost maritime center, as it has almost monopolized all fields of maritime services, including ship leasing, ship financing, marine insurance, and maritime legal services. London is home to some of the most influential shipbrokers, accounts for 60 percent of the global P&I (protection and indemnity) insurance market, and handles 80 percent of all arbitrations concerning international maritime disputes.

The international maritime services industry also involves risks to national economic security. Lessons can be learned from Russia and Iran: When their marine insurance was subject to sanction by the United Kingdom and the United States, their cargo vessels struggled to sail and goods could not be delivered, causing their international trade to be temporarily interrupted.

The central government has long recognized the importance of the international maritime-services industry. The resolution adopted at the third plenary session of the 20th Central Committee of the Communist Party of China in July mentioned the need to “raise the underwriting capacity of shipping insurers, help them provide better global services, and introduce new systems and rules on the arbitration of marine affairs”. In December, President Xi Jinping emphasized in Macao that “development ensures security”.

With the distinctive advantages of the “one country, two systems” framework, Hong Kong enjoys the strong support of the motherland while being closely connected to the world. The regulatory framework for international maritime services is based on common law principles. Hong Kong is the only common law jurisdiction in China. Among all the places practicing common law, Hong Kong is the only one that applies a bilingual system with Chinese and English as official languages, which can help the city become a hub for international maritime services for the country. Hong Kong is also the world’s freest economy for capital flows, facilitating significant international capital movements that provide international maritime services.

Therefore, Hong Kong is the only place capable of developing an international maritime-services center and fulfilling this critical task of safeguarding national security across the entire country. Only by completing this mission can Hong Kong highlight its unique position and ensure that “one country, two systems” remains sustainable in the long run.

The SAR government should swiftly shift its focus, transitioning from a traditional cargo hub to a high-value service provider and establishing an international maritime services center. It is a task of safeguarding national security and a vital step toward economic reform and transformation of Hong Kong, paving the way for a new phase of development and prosperity

Although London holds an almost monopolistic position, the central government provides the firmest support for Hong Kong to develop as an international center for maritime services, presenting unlimited opportunities and potential.

The future of the shipping finance business derived from the shipbuilding industry is promising. As of October, China’s shipbuilding industry has secured over 1,000 new ship orders, accounting for more than 70 percent of global orders. With an average price of approximately $90 million per vessel, the total financing for new ships amounts to about HK$700 billion ($90 billion). If Hong Kong’s shipping finance sector manages to raise funds for half of these transactions, the amount would be four times the Hong Kong Exchange and Clearing’s total IPO fundraising of HK$87.6 billion in 2024.

Cargo vessels need replacement every 20 to 30 years. In 2023, the United Nations International Maritime Organization called on the global shipping industry to replace ships with “green shipping” alternatives to achieve carbon neutrality by 2050. Additionally, Saudi Arabia and Russia are actively building their merchant fleets. The market demand for shipping finance is strong, with immense development potential.

China aims to enhance its marine insurance capabilities and global service standards. Only Hong Kong, with its free flow of capital, can handle claims worldwide. With appropriate policy support from the Hong Kong Special Administrative Region government, it is expected that more marine insurance companies, along with tens of billions of dollars in capital reserves, will establish operations in Hong Kong, thereby driving growth in the related financial investment markets as well.

However, Hong Kong lacks sufficient shipping services enterprises and professionals to provide corresponding services to clients. The SAR government must promptly introduce policies to attract firms and talent from around the world to Hong Kong. A cross-departmental committee on maritime development, chaired by the financial secretary, should be established to coordinate multidepartmental collaboration.

The SAR government should adopt a proactive approach, actively engaging with global maritime-services providers to better understand their needs, and leverage policy tools and tax incentives to encourage them to establish a presence in Hong Kong. For example, enterprises could be offered tax deductions if they specify Hong Kong as the sole jurisdiction for dispute resolution in shipping finance and marine insurance contracts. Additionally, the government could provide interest-free loans and tax incentives to help Hong Kong enterprises compete for talent globally.

Local talent can benefit from international experts’ on-the-job training by bringing maritime services professionals to Hong Kong. Young people will naturally be drawn to this field once the shipping services industry gains momentum and recognition.

It is anticipated that Hong Kong’s cargo volume will further decline as ports on the Chinese mainland continue to develop and the global supply chain undergoes structural changes. Instead of dwelling on the past, it is better to look toward the future. The SAR government should swiftly shift its focus, transitioning from a traditional cargo hub to a high-value service provider and establishing an international maritime services center. It is a task of safeguarding national security and a vital step toward economic reform and transformation of Hong Kong, paving the way for a new phase of development and prosperity.

The author is a member of the Legislative Council representing the Legal Functional Constituency, and a former president of the Hong Kong Law Society.

The views do not necessarily reflect those of China Daily.