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STH's speech at seminar on Hong Kong as a Regional Logistics …

STH’s speech at seminar on “Hong Kong as a Regional Logistics Hub – the Best Link in Your Global Supply Chain” in Milan Hong Kong (HKSAR) – Following is the speech by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, at the seminar on “Hong Kong as a Regional Logistics Hub – the Best Link in Your Global Supply Chain” in Milan today (June 14, Milan time) (English only): Distinguished guests, ladies and gentlemen, Good morning. It is an honour and a pleasure to visit Milan. In fact, I was just here during Easter time with my wife on holiday.

I reckon that over the last three years, I have been in Milan three times, including this one. Milan to me is a beautiful and great city. I thank you all for giving me and representatives from the Hong Kong Logistics Development Council an opportunity to introduce what Hong Kong can offer to Italian businesses.

Presenting with me this morning are two successful logistics players from Hong Kong. Sitting immediately to my right is Mr C C Tung (Tung Chee-chen), Chairman and CEO of Oriental Overseas (International) Limited, and further to my right is Mr David Kuk, Managing Director of DCH Logistics Company Limited. In a moment, they will share with you their insight on Hong Kong’s role as an Asian logistics hub, from the perspective of a leading cargo carrier and that of a logistics services provider.

Italy and Hong Kong have maintained good trade relations for decades. In 2012, Italy was Hong Kong’s 15th largest trading partner in the world, and the fourth largest trading partner among the European Union member states, Despite the eurozone sovereign debt problem, we saw imports from Italy growing by 2.8 per cent in 2012. This no doubt reflected the strong consumption in fast-growing Asian economies, particularly the Mainland of China.

China’s GDP has increased by 170 per cent between 2002 and 2012 and is forecasted by the International Monetary Fund to grow by 7.75 per cent this year. The rise of an affluent middle class in China and other burgeoning Asian economies has made Hong Kong particularly relevant in your search for new markets and to reach out to potential customers in the Far East. In 2012 alone, the luxury goods market in China grew by 6 per cent.

China is forecasted to be the world’s biggest luxury goods market by 2020. Globally, Chinese consumers are already the number one buyers of luxury goods, responsible for 25 per cent of total sales. They cannot all come to shop at your Quadrilatero d’Oro, although they may all wish to do so.

The next best thing for them to do, apart from flying to other shopping capitals, is to buy the top-notch products either in the big cities of, say, Shanghai, Beijing or Guangzhou. Or, as many of them have been doing, shop in Hong Kong. In fact, “made in Hong Kong” or “shop in Hong Kong” is a very important symbol of reliability and efficiency for many Chinese visitors.

The same goes for other discerning consumers across Asia. This is where Hong Kong comes in. Hong Kong has established itself firmly as the gateway to China, particularly South China, and a regional logistics hub.

About 20 per cent of China’s international merchandise trade is routed through Hong Kong. Many international brands of high-end products prefer to distribute their goods from Hong Kong, rather than shipping them directly to Mainland China and other Asian cities and countries, and for good reasons. Because of Hong Kong’s central location in the Asia-Pacific region, passengers can reach all major Asian cities by air within four hours, and half of the world’s population within five hours.

So you can imagine how strategically located Hong Kong is. Hong Kong is a free port, and levies no tariff on imports, including wines. The taxation rate is low and the tax system simple.

Our rule of law is well-entrenched. Capital and information flow freely. We also provide a level playing field for all enterprises.

Hong Kong has consistently been ranked the freest of all economies. We have transparent customs procedures and efficient customs clearance – within 80 minutes for air cargo. Our logistics services providers maintain tight security all along the supply chain and intellectual property protection is vigorously enforced, ideal for precious goods, brand-name products and pharmaceuticals.

On top of that, Hong Kong is home to the largest community of shipping, freight forwarding and logistics operators in Asia. Our logistics services providers offer tailor-made supply chain solutions and comprehensive value-added services like bar-coding, price-tagging, pick and pack, quality control and customs clearance. Because of Hong Kong’s long history as a trading hub, our logistics service providers have accumulated immense knowledge and experience in handling all sorts of goods, from wines to heavy construction machinery, from art treasures to sport horses.

They have common language, cultural affinity and long-time experience with Mainland business and government organisations, while being fluent in English and well-versed in international business protocol. We know the China market very well, have learnt from our own fingers-burnt experience sometimes, and are well poised to share such experience as well as expertise with our overseas trading partners seeking to do business in China. Our resilient logistics workforce is complemented by Hong Kong’s world-class air and sea connectivity.

The Hong Kong International Airport is the busiest international cargo airport in the world. It is served by some 7,000 flights every week, so we are talking about 1,000 flights a day on average, to 170 different destinations in the world and among those destinations there are about 50 on the Mainland of China. On the maritime side, Hong Kong’s container port is among the world’s busiest container ports.

Last year alone, we handled over 23 million twenty-foot equivalent units. The port is served by some 410 weekly sailings to about 520 destinations. On the land side, Hong Kong has an extensive road network connecting the territory with the fast-booming neighbouring Guangdong Province of China.

There are four land crossings along the border between the two places and a fifth one is under construction for completion in 2018. We are also building a mega-bridge to link up Hong Kong with Macau and Zhuhai city in South China. It is scheduled for completion in 2016.

At the same time, we are building the high-speed rail link to Mainland China for completion in 2015. Planning is under way for building a third runway system at our international airport which will increase runway capacity by 50 per cent when completed. We will also take forward a dredging project to deepen our container port channel so that the new-generation ultra-large container vessels could berth at any time.

It is therefore no surprise that world-famous brands like LVMH, Burberry, A&F, Timberland, Philips, Canon and Schneider Electric have decided to use Hong Kong as a regional distribution centre. With nearly 35 million tourists from Mainland China visiting Hong Kong in 2012, flagship stores of international brands are commonly found in Hong Kong’s shopping malls. Two months ago, a pair of giant, six-metre-long shoes appeared outside a harbourside shopping mall in Hong Kong – that is the symbol of Superga, which launched its first store in the territory, with a plan to open 10 more within a year in Hong Kong and on the Mainland.

We welcome not just branded products, but different businesses, big or small, to establish offices in Hong Kong. Italian logistics companies are also welcome. Indeed, one Italian-based global logistics company, Om Log srl, which specialises in serving the high-street fashion industry, has established its regional headquarters in Hong Kong for the Asia-Pacific region.

Foreign companies which establish businesses in Hong Kong or partner with Hong Kong companies stand to benefit from Mainland and Hong Kong Closer Economic Partnership Arrangement (or CEPA) with Mainland China. This is by nature a free-trade arrangement which allows Hong Kong products to enjoy zero tariffs on importation to the Mainland, and, being nationality-neutral, gives Hong Kong-based foreign companies greater access to the Mainland market. In January this year, Hong Kong and Italy have signed an agreement for the avoidance of double taxation.

This will no doubt provide added incentives for Italian enterprises doing business in Hong Kong. Before I close my opening, I would like to extend my warm invitation to each of you here to the Third Asian Logistics and Maritime Conference to be held in Hong Kong on November 7. It will be a big event in Hong Kong where you will see for yourself the expanding logistics landscape of Hong Kong and Asia, and meet with potential business partners.

We look forward to seeing you there. Thank you. Source: HKSAR Government 1 Published on: 2013-06-14 Limited copyright is granted for you to use and/or republish any story on this site for any legitimate media purpose as long as you reference 7thSpace and any source mentioned in the story above.

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