Relaxed mainland port rules could slice 14pc off Hong Kong’s container throughput, says report

A full relaxation in the mainland’s laws prohibiting foreign-flagged vessels from moving cargo from one mainland coastal port to another, according to Hang Seng Management College (HSMC), Hong Kong could lose all transshipment rights in the non-Pearl River Delta region, which could translate into a loss of 2.4 million container twenty-foot equivalent units (TEU) which would mean a 14 per cent loss of the city’s annual total container throughput.

The relaxation of the transportation rules, commonly called cabotage in the industry, started in 2013. China also launched the Shanghai Pilot Free Trade Zone in 2013 meaning foreign-flagged but Chinese-owned ships can now engage in domestic shipping. Qingdao, Ningbo and Guangzhou have been lobbying hard for a relaxation of their own cabotage rules. Nansha Free Trade Zone in Guangdong province, is progressively introducing measures to promote transshipment trade.

China’s relaxation of the rules means Hong Kong’s status of being a transit hub is shrinking. The HSMC study shows there were 765,000 workers engaged in the Hong Kong trading and logistics sector, accounting for a fifth of the city’s total employment, and generating a quarter of the city’s GDP. The port and logistics sector employed 92,000.