Trade deal could give Hong Kong edge in China logistics

Trade deal could give Hong Kong edge in China logistics

Hong Kong expects a new trade accord with China to give its logistics firms an edge over foreign operators.

From Jan. 1, the free-trade agreement known as the Close Economic Partnership Arrangement (CEPA) gives Hong Kong companies providing logistics, storage and warehousing, forwarding, road and maritime transport services the right to set up wholly owned units to operate on the mainland.

"This will allow Hong Kong companies greater flexibility and business opportunities in the mainland," said Stephen Ip, chairman of Hong Kong's Logistics Development Council and Secretary for Economic Development and Labor. The council "welcomes CEPA as it will bring enormous business opportunities to Hong Kong, facilitate our economic recovery, boost investment between the mainland and Hong Kong, and help improve the local employment situation."

Talks will be held with the private sector ahead of discussions with mainland authorities on implementation of the CEPA provisions, he said.

Ip expects the second half of 2003 to be a busy one for logistics companies in Hong Kong. He said the industry had successfully weathered the SARS crisis. "Such resilience reinforces our confidence in the logistics sector as one of Hong Kong's economic pillars," he said.

The council also said improvements have been made toward seamless freight flow across the boundary with China. Ip said 97 percent of northbound freight vehicles and 84 percent of southbound trucks cross the boundary within one hour.

Congested border crossings have long been a headache for shippers and carriers, especially since many of the trucks to and from the main container complex at Kwai Chung carry only a single box per journey.

New cross-boundary transport infrastructure projects are in various stages of planning and construction.

The authorities in adjacent Shenzhen, whose ports are growing rapidly in part at Hong Kong's expense, plan to invest heavily in the construction of six logistics parks by 2005, with the aim of developing Shenzhen into the largest logistics park region in southern China.

A sub-group of the Hong Kong council is moving ahead on defining the broad planning parameters for development of a value-added logistics park, Ip said.

To promote Hong Kong's logistics advantages to potential users, another project group is working on plans to organize an international logistics conference and to partner with the Trade Development Council in staging the second Logistics Conference and Expo in neighboring Guangzhou next spring.

No details of the Hong Kong conference were immediately available.

- with contributions from William Armbruster in Newark