The Future of Maritime Policy in Hong Kong

 Shipowners' Perspective

Extracts from a speech given to Maritime Day 2005  -Saturday, 16^th April 2005

Arthur Bowring -Managing Director

Hong Kong Shipowners Association

I am asked to speak about future shipping policy, but as it has become increasingly apparent that the public's understanding of the word "shipping" has more to do with the movement of household goods than the operation of ships, I have amended the title to read "future maritime policy". I hope you will forgive this small touch of pedantry.

What is maritime? Maritime is both global, perhaps one of the most complete global businesses, and mobile. It is wise to like travel to enjoy a career in the maritime industry, for the reasons that it is intensely competitive on a global scale, and not afraid of pulling up roots to remain competitive or to access cargoes and businesses in growing economies. By the "maritime industry" of course, I include not only the operation of ships and the use of ships in the commodity chain, but also the myriad of companies and individuals that supply the necessary and wide variety of services.

What makes maritime attractive to governments? Maritime businesses tend to not pay very much tax, and certainly do not employ armies of people. So there is no attraction to governments keen to collect tax income or boost employment. But, as the consultant's report to the Maritime Industry Council clearly showed a couple of years ago, the maritime industry contributes in a major way to invisible earnings. Per person employed, a company owning or operating ships is the largest contributor to Hong Kong's invisible earnings. As Hong Kong is increasingly and now almost solely a services oriented economy, where performance is measured in invisible contribution, this is important, and is the reason why the maritime industry is one that many Governments around the world are keen to attract.

Why Hong Kong? Hong Kong does not have any of the elements that would traditionally have encouraged a home fleet. There is no cabotage trade, no navy, no defence requirements for marine transport, or any of the elements that would, and in many cases still do, encourage a home fleet of ships. But Hong Kong does have an open economy, the rule of law, and very efficient and economic communications with the rest of Asia and a history of being the gateway to China. But Hong Kong also has a very active and supportive local maritime community as well as an international environment that attracts businesses from around the globe, keen to do business in China and the rest of East Asia.

The Hong Kong Shipowners Association works to encourage the cohesiveness of our maritime community, by holding many social and educational events to bring our members together. We lobby the Hong Kong government on important issues that affect the maritime community and also work with international organizations and foreign governments both to protect the industry from over-zealous regulation as well as to promote our technical expertise. We are convinced that Hong Kong is the right place for a maritime business to relocate to, and the demonstration of our expertise is, to our mind, one of the best ways to promote Hong Kong internationally.

What do we want as future maritime policy in Hong Kong? First of all, what we don't want is for the industry directly to be given large sums of money by Government; direct subsidy, if you will. This seems odd, but as others in other centres are finding out, the provision of cash brings with it overwhelming accountability and control by the provider of the cash, as well as an apathetic attitude and future dependency by those receiving it. Without an easy access to cash, all decisions have to be commercially justifiable - if they do not meet commercial targets then they don't go ahead. This has to be a far better and more efficient way of creating projects than by having your donor breathing over your shoulder and little actual contribution by the rest of the industry.

What we would first of all like from our Government is enthusiastic and willing moral support. This may sound wishy-washy, but what we mean is an acknowledgment from all sectors of Government of the contribution of the maritime sector to Hong Kong's economy. Moral support would, in turn, encourage common direction of policy by all departments towards the goal of proper recognition of the benefits of having a maritime industry. This would take the form of enthusiastic support for our various initiatives, without trying to control them, in a way that would encourage others to offer support in kind or to make donations. An indifferent government, or one that sees the industry as a bunch of crooks, not to be trusted, only serves to turn off potential support from others. And, as shown by experience, financial support, when it becomes available, follows common recognition.

In concrete terms, we would like more emphasis on and proper support for maritime education and training, maritime higher education and research, maritime short courses, etc. While Government cannot, by itself, directly create more maritime training, we believe that such expansion would follow the open and common support of our industry by government officials recognizing and speaking out about how important the maritime sector is to Hong Kong. Isn't it amazing how so many education providers rushed to start "logistics" courses in reaction to the Government saying that logistics is the future of Hong Kong? And, for those in the audience that didn't know, maritime is not the same as, or even a part of, logistics! They are linked, but they are not the same. Government's awareness of the importance of education and training to the future of our knowledge economy should ensure that funds are made available to educate and train those needed in the essential industries, including the maritime industry.

As an aside, we deeply appreciate the work of the Poly-U in championing education for the maritime industry, and will do what we can to support and extend this.

We would like Government to recognize the importance of the industry's work in promoting Hong Kong. We are promoting Hong Kong's maritime sector for Hong Kong's future, and Government's recognition of this, as well as financial and keen moral support, would greatly assist us. Again it is essential, to our mind, that these events are planned, organized and held by the industry, because it is industry that understands how best to focus and direct promotional efforts.

We would like Government support for our beleaguered Marine Department. Here we have the world's largest container port, one of the busiest fairways in the world, and a ship register that is now one of the six largest in the world. But we have a extremely efficient and capable marine department under cost-cutting pressures similar to those faced by all branches of government. Large registers and busy ports bring with them international responsibilities that cannot be ducked without creating an impression of irresponsible disinterest and only being in it for the money. These responsibilities include participation by the Government and the industry in a meaningful and leading way at international meetings, including inter-Governmental policy and technical meetings, as well as industry conferences. Large registers and busy ports create an influential position on the world stage that, if used properly, pushes our city to a leading position, but if not used or used badly, creates a very unfavourable impression. The Marine Department is doing a fantastic job with very limited resources; we have the possibility of further influencing all that goes on in the international maritime arena; let's use it!

We would like the maintenance of our fabled "laissez-faire" business environment. I won't comment on whether or in which areas we might have been losing our traditional freedoms, but it is essential that we work to maintain our rule of law, as an example. The perception created by apparently ignoring our common law system in the political arena has a very undesirable effect on how the world perceives the way in which our common law system works in commercial areas.

And we would like to see the negotiation of a regional free trade agreement with the mainland that recognizes that Hong Kong is now part of China. CEPA, unfortunately, does not. As our analysis has shown, CEPA largely repeats the contents of the US and EU trade agreements with China but with much more restrictive participation requirements. As a part of China, genuine Hong Kong businesses and individuals should be given access to the mainland markets that is not given to others, despite the fact that we cannot match the negotiating power of the US or EU.

The Maritime sector is one of the original pillars supporting Hong Kong's amazing growth over the past few decades. It is still one of our most active and important pillars, its role undiminished in Hong Kong's rapid economic growth and move from an industrial economy to one based almost entirely on services. Our future maritime policy request is to accept this, promote it, and use it as broad policy across all sectors of government.

Thank you.