Chairman’s Message (Annual Report 2018)

2018 Prompted Cautious Optimism And Excitement

We kicked off 2018 by presenting a challenging wish list to urge the government to bolster local logistics industry as a way to give credit to its increasingly important role in the future economy.

This included ensuring Hong Kong remains a global logistics centre, all while playing a significant role in the Greater Bay Area, the Belt & Road Initiative, and other ASEAN developments. We also urged the government to prepare Hong Kong to meet the challenges of the rapid and major transformation of the world economy and expedite the development of a new air cargo security regime for Hong Kong.

Furthermore, we pushed the government to assist our trade market in taking full advantage of the Hong Kong-ASEAN Free Trade Agreement, which will be implemented in 2019.

Sailing into March and April, we were quick to remind the industry to be cautiously optimistic for 2018 and alerted the sector to stay alert all the time and plan for risks, even though the US economy was on track for steady growth in 2018; thankfully 2017 was not a bad year as far as international trade was concerned.

We also wholeheartedly pointed out that our future would be considerably shaped by technology, and this means that we must deal with the issue of adoption and application of technology, especially for those technologies developed natively so that these technologies could be applied and thrive in the real business world.

It is also important to note the lack of collaboration or an effective mechanism that links the private sector and the researchers and research institutions together like in the West such as Germany. This is something the government could play a part in to promote this kind of mutually beneficial partnership.

I also highlighted the anticipated synergy for Hong Kong and Shenzhen to work closer together on the technology front as a result of the Guangdong-Hong Kong-Macao Greater Bay Area concept.

After my visit to Xian in late April 2018, which was conducted as a member of a major trade and economic delegation of the Hong Kong Trade Development Council, I was so encouraged by the development potentials and business opportunities there that I immediately suggested HKTDC to organise a dedicated visit for the Hong Kong logistics sector.

As Xian is known for being a well-connected transport hub of the north-west, I can foresee ample opportunities for cooperation between Hong Kong and Xian, in terms of logistical and technological innovations.

Hong Kong is a well-established international business centre with comprehensive professional services that can cater for establishment and operations of commercial enterprises. As a global financial centre, we can provide crucial financial support so that a Hong Kong-Xian partnership will no doubt stand to be a mutually beneficial arrangement.

As we passed the mid-year mark, I sent out a high-level alert to caution the industry of the impact of the trade war.

I urged Hong Kong importers, exporters, and shippers to take all precautionary measures against intensification of trade conflicts, especially trade made with the United States.

I warned that trade conflicts would expand and could be long-lasting; I also stressed that the issue was highly complex and there were bound to be substantial changes in due course.

I also put forward advice to help traders and shippers counter the unfavourable situation, such as advising them to be more watchful of upcoming developments, apply thorough risk assessment and management techniques, and explore the various options of out-sourcing production or supply of products to countries like ASEAN countries in order to lessen the impact.

Coming towards the end of 2018, caution was, once again, my mantra.

I made sure the industry would proceed carefully in exploring an alternative ASEAN market. With the Sino-US trade war still in progress, there were increasing interests in relocating manufacturing facilities from the Pearl River Delta (PRD) to ASEAN countries - especially those in Indo-China.

I shared some insights with SMEs to better prepare and protect themselves in their relocations such as how to select the right country, as well as the potential risks in terms of political and socio-economical systems, cultures, traditions, stages of development, governing ideologies, races, religions, and so on.

The rule of thumb would be to carry out careful and thorough studies, instead of relying solely on studies from consultants before making significant investment decisions for relocation.

As 2018 came to a close, I was delighted to highlight two very significant topics of great interest for logistics industrialists in Hong Kong, and the Asia Pacific region: the Lantau Tomorrow project and the opening of the Hong Kong-Zhuhai-Macao Bridge on October 23, 2018.

The road links from the Lantau Tomorrow project will provide critical improvement to the layout of the whole Hong Kong transport system. Furthermore, it will provide the desirable diversion and new traffic systems, and it will benefit both passenger and cargo traffic. Overall, traffic efficiency would be greatly enhanced.

As Chairman of The Hong Kong Shippers¡¦ Council, I must reiterate the importance of connectivity, ease of access, and good infrastructure. These are core of good logistics, which is critical for maintaining competitiveness of Hong Kong’s trading and logistics activities.

Likewise, the Hong Kong-Zhuhai-Macao Bridge is important. Some critics said that the project would be a white elephant.

However, history tells us that those comments are often found to be too short-sighted. We have heard similar comments regarding Hong Kong International Airport, the Shenzhen Bay Crossing, and even the MTR project when the idea was first raised in the 1970s.

Obviously, 2018 was another roller-coaster year but at least it ended on a cautiously positive note with Hong Kong being thrown a lifeline in terms of having wider connectivity with the mainland for better mobility, connectivity as well as safety in the big picture of expanding logistics for the region and the world.

While I eagerly await to see what this year will reap, I still do so with cautious optimism. However, with such exciting logistical and technological prospects awaiting us, I could perhaps err on the side of optimism just a little more this time.