Hong Kong, Twice Cooked?

The Hong Kong Development Council’s annual Asian Logistics and Maritime Conference is coming up in a couple of weeks, and it comes at what looks to be a critical time of change in one of the world’s great trading cities.

Hong Kong officials have been playing up the city’s identity as a logistics hub lately, but it’s important to remember that Hong Kong’s identity and very high profile4 in transportation isn’t necessarily at the high end of the logistics market.

That’s why some in the region believe Hong Kong’s bid to establish itself as a hub for true logistics is a bit shallow and late to the game.

The trouble is, Hong Kong is squeezed by both its history and its geography. The Special Administrative Region of China benefits from its proximity to mainland China and the huge volume of goods that flow from the nearby factories in the Guangdong province. But that enormous flow of shipments through both the Port of Hong Kong and Hong Kong International Airport also limits the city even as mainland China tries to expand and extend its reach into the supply chain.

That’s part of the strategy in Shanghai we described this year: The port and other operations in the city are trying to move up the supply chain value ladder in ways that challenge Hong Kong’s advantages in financial and trade management services.

Closer to Hong Kong, Shenzhen is looking to compete with its own huge logistics fair, where there are growing signs that many in that city is deeply interested in making a serious move to add logistics sophistication to their role, and spread out from the mainland's huge but narrow place in supply chain to greater value add.

A speaker at a logistics forum attached to that trade fair — Zhou Gui Hui, chairman and CEO of Eternal Asia Supply Chain Management — described exactly that business model for his company, and how it fits into an approach he expects to see across China.

-- Contact Paul Page at ppage@joc.com. Follow him on Twitter @PaulPage.

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