Hong Kong port losing market share in south China
Preference for city diminishing as shippers are lured by the increased capacities at mainland rivals amid stiff competition for the same cargo
A report on Hong Kong's port development commissioned by the government found that the city has been facing more competition from other south China ports, including Nansha, one of the regions in the new Guanghong free-trade zone approved by the State Council last week.
Although Hong Kong remains competitive in international transshipments, it had been facing increasing competition in the south China cargo market, the report said.
Hong Kong's share of the south China cargo base had dropped from more than 70 per cent in 2010 to below 40 per cent in 2011, the report showed.
"Current trends suggest a diminishing preference for using Hong Kong port for south China cargo, which is related to the significant increase in port capacity that occurred in south China in the last 10 years, giving shippers much more choices," it said.
The report expects transshipments to account for 75 per cent of Hong Kong's throughput by 2030.
The government released the findings of the report earlier this month together with a preliminary feasibility study for container terminal 10, and dismissed the need to build another terminal before 2030.
It did not, however, address the possible policy changes in relation to a Guangdong free-trade zone or how the city would coordinate with such a zone, including ports in the area.
The report said ports in Shenzhen and Guangzhou, including Nansha, shared overlapping hinterlands and compete for the same cargo in the region.
"The original Guangzhou port has older, more limited facilities, particularly for container handling," it said. "The new container terminal at Nansha is built to modern standards and has space for further expansion."
A statement posted on the central government website after a State Council meeting last Friday said the country would set up three more free-trade zones - in Guangdong, Fujian and Tianjin - on the heels of the pilot zone in Shanghai.
It said policies at the new zones should be based on those adopted by Shanghai and updated according to each region's characteristics. No further details were released.
Mainland reports said the Guangdong free-trade zone would include Qianhai, Hengqin, Nansha and the Baiyun airport bonded zone in Guangzhou, comprising more than 295 sq km - much larger than the 28 sq km Shanghai zone.
The reports also suggested the zone would involve Hong Kong and Macau.
"With a much larger area, the Guangdong free-trade zone has much greater potential than Shanghai," said Jonathan Choi Koon-shum, the president of the Chinese General Chamber of Commerce.
Choi said he expected Qianhai to focus on finance, Hengqin - which is close to Macau - on tourism, and Nansha on high-end manufacturing. The chamber has an office in Nansha.
"I worry that Qianhai is becoming a property project," said Stanley Lau Chin-ho, the chairman of the Federation of Hong Kong Industries, referring to the property prices in the region which rose in an anticipation of the favourable new policies.
