1. Frankie Yick HKSAR Legislative Councillor (Transport Functional Constituency) 26 th February, 2013 1 Hong Kong’s Shipping and Logistics Sector – Challenges and Opportunities

2. Hong Kong’s Shipping and Logistics One of the Economic Pillars:  produced HK$105 billion in value added  contributed to 6% of GDP  Provided about 200,000 jobs (6% of total employment)  In 2012,  total freight movement is about 300 million tonnes.  total container throughput is about 23 million TEUs. 2

3. Strategic Location Heart of Asia Half of the world’s population living within five hour’s flight of HK Southern doorstep of Mainland China* * One of the world ’ s largest manufacturing bases with strong exports and imports growth 3

4. Gateway to Southern China 70% of cargo throughput handled in Hong Kong is from the Southern China 20% of China’s external trade in goods passes through Hong Kong Four cross-boundary control points connecting Hong Kong and South China Lok Ma Chau Man Kam To Sha Tau Kok Shenzhen Bay 4

5. Aviation Hub Hong Kong International Airport (HKIA) is one of the busiest airports in the world 6,700 flights per week 170 destinations (including 40 destinations in Mainland China) 56.5 million passengers 4 million tonnes of air cargo 5

6. Shipping Hub World’s third busiest container port after Shanghai and Singapore About 410 container liner services per week reaching 520 destinations worldwide As at end-December, 2,193 ships with a total gross tonnage of 78.9 million were registered with the HKSAR (3rd position in the world in ranking as a place for ship registration) 106, 391 cargo vessels visited Hong Kong in 2012, one- quarter of which were ocean-going vessels 6

7. Competitive Advantages Free port Simple and low tax regime Quick and transparent customs procedures Reliable security, quality assurance and intellectual property protection CEPA - Closer Economic Partnership Agreement 7

8. Fierce Competition Shenzhen 200420082012 Container throughput 13 million TEUs21 million TEUs22.9 million TEUs 8 Hong Kong 200420082012 Container throughput 21 million TEUs24 million TEUs23.1 million TEUs Sea Cargo - Hong Kong vs. Shenzhen

9. Fierce Competition Guangzhou Baiyun International Airport (3 rd busiest cargo airport in China) 200620082012 (+81%) Cargo throughput650,000 tonnes 690,000 tonnes 1.25 million tonnes 9 Air cargo - Hong Kong vs. Guangzhou Hong Kong International Airport 200620082012 (+10%) Cargo throughput3.58 million tonnes 3.63 million tonnes 4 million tonnes

10. Global Economic Uncertainties European sovereign debt Slow recovery in US Forecast on global GDP growth 2.4% - 3.6% 10

11. Economic Outlook for Asia The economic outlook for the Asian region, especially Southeast Asia, however, is much brighter, owing to the relatively stable public finance and flexible financial policies. the Organisation for Economic Co-operation and Development (OECD) suggests that the economic growth of Southeast Asia will return to the pre- financial crisis level within the next five years, as driven by domestic demand growth, particularly private consumption and investment. 11

12. National Support the National 12th Five-Year Plan continuing to support Hong Kong in developing its financial services, shipping, logistics, tourism, professional services, information and other high-value-added services; supporting Hong Kong to develop into a high- value goods inventory management and regional distribution centre 12

13. Government’s support Committed to consolidating Hong Kong’s leading position as an international aviation and maritime centre and a regional logistics hub. In the 2013 Policy Address: “… will continue to improve our aviation, maritime and land transport facilities and their connectivity, and reinforce and enhance Hong Kong’s role as a regional hub for passenger and cargo traffic.” …cont’d 13

14. Government’s support Established an Economic Development Commission (EDC) with the Working Group on Transportation to review the policy formulation and institutional arrangements for supporting the maritime and port development Consultancy Study on Enhancing Hong Kong’s Position as an International Maritime Centre The Study on the Strategic Development Plan for Hong Kong Port 2030 In-principle approved the construction of the third runway (2023) 14

15. Challenges Government Support Institutional Land supply Policy change Manpower Shortage Talent training and retention Front line work force 15

16. Thank You! 16