Untitled - Civic Exchange

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SUSTAINABLE TRANSPORT IN HONG KONG: DIRECTIONS AND OPPORTUNITIES A Steering Committee on Logistics Development has been established with Hong Kong's Financial Secretary as chair and is responsible for accelerating measures to take forward "Logistics Hong Kong." A Hong Kong Logistics Development Board is also being created. Within the administration, the Port and Maritime Board division has been restructured as the Port, Maritime, and Logistics Development Unit. 220 At the airport facility's groundbreaking ceremony, Sandra Lee, the Government's Secretary for Economic Services, said, 221 "The logistics industry encompasses sea, land and air services. Taken together, trade, transport and logistics industries make up 21.6% of our GDP, employ 20% of the total workforce. To develop this industry, we need to enhance connectivity between the various sectors in the supply chain, such as those between different modes of transport and those between Hong Kong and our cargo sources. We also need to facilitate collaboration amongst the players in the chain so as to strengthen the four pillars of 'Logistics Hong Kong' - physical, electronic, human resources and marketing logistics (the 4 'Ls'). The 2 'Cs', that is, Connectivity and Collaboration and the 4 'Ls' form the base on which the development of our logistics industry can be built." Meanwhile, there is questioning as to whether much freight needs to be moved through Hong Kong at all. There is good reason to examine the economic value of being a trans-shipment hub. Assessment of the economic benefits and environmental costs of moving increasing amounts of freight through Hong Kong's territory could well point to the need for other options to secure the HKSAR's economic future. In March 2002, the Port and Maritime Board commissioned Maunsell Consultants Asia (a participant in the production of the McClier Report) to examine, among other things, whether Hong Kong could be an international maritime centre without its port. 222 Maunsell will determine the contribution of each of the maritime sectors to the economy and employment, benchmarking them against sectors in other maritime centres. The consultants will examine information technology and human resource needs and prepare a master plan - possibly for the emergence of a "virtual maritime center." Such a development would resemble the transformation of Hong Kong in the 1980s and early 1990s from a leading exporter of light manufactured goods to a major service economy. Hong Kong has been described as the leading example of the "virtual economy," defined as "an entity with research development, design, marketing, financing, legal, and other headquarter functions, but few or no manufacturing facilities." By 1997, Hong Kong companies employed 3-4 million workers in China, and Hong Kong was the world's fourth largest source of outward direct investment. Hong Kong achieved this by "successfully hollowing out itself, shifting production elsewhere, and moving up the value-added chain into the services sector." 223 There is evident tension between the recent thrust to move freight more expeditiously through Hong Kong and the even newer thrust to move less freight through Hong Kong but control more of its movements elsewhere. How this plays out over the next few years will be of great interest. 66 220 Economic Services Bureau (2001), Logistics Hong Kong, a paper presented to the Legislative Council Panel on Economic Services, Hong Kong: HKSAR Government, Oct 2001. 221 This quote is taken from the report on the groundbreaking ceremony on the website of the Hong Kong Trade Development Council at . 222 As reported in Hong Kong iMail, March 25, 2002. 223 This paragraph is based on a 1997 speech by Andrew Sheng, Deputy Chief Executive of the Hong Kong Monetary Authority, to a seminar organized by Nikko Research. The speech can be found at .
Chapter 6: Hong Kong's Freight Transport In the meantime, notwithstanding the somewhat frenetic activity of the government and several privatesector interests, the prospects for moving more freight through Hong Kong do not seem good. Several adverse factors were noted in the previous section in connection with discussion of what seem to be fanciful projections for increased port activity and, by extension, increased activity across the land border. An additional factor that has received little attention in Hong Kong is the renewed interest in improved rail links between Asia and Europe. The last major review of freight transport in Hong Kong provided extensive discussion of rail developments in mainland China and noted the possible development of a "Euro-Asia Land Bridge." 224 There was little interest in this concept during the late 1990s, but in 2001, the Paris-based Union Internationale des Chemins de fer (International Union of Railways, usually known by the acronym UIC), began discussing the idea. UIC has undertaken several studies and projects on the establishment of an intercontinental rail freight corridor linking Europe and Asia, with trans-Atlantic sea links to eastern North America. The overall concept is illustrated in Figure 6.8. Specifics of what is presently the most favoured routing are in Figure 6.9. 225 This would run from Lianyungang, a port in Jiangsu province, north west of Shanghai, to Narvik, a port in Norway. 226 The UIC research suggests that moving freight by rail could provide a lower-cost, more reliable service than moving it by sea. In a different context, Korean authorities have estimated that shipping containers by rail from South Korea to Europe - through North Korea, if that becomes possible - would be twice as fast and one-quarter the cost of shipping by boat. 227 The availability of onward passage from Narvik to Halifax and Boston could result in less expensive access to North American markets for all parts of Asia connected to the land bridge. At present, the UIC land bridge concept does not include Hong Kong (see Figure 6.8). Nor does an alternative concept linking Southeast Asia to Europe via New Delhi and Istanbul. 228 Even if a proposed route did include Hong Kong, we would in any case be at the far end of the line, with little to export. However, in an interconnected world, Hong Kong interests could provide significant investment in a Euro-Asian land bridge and play a significant part in its management. Yet another factor to be taken into account is the aftermath of the events in the United States on September 11, 2001. Initial observations suggest that these terrorist attacks have produced a paradigm shift in business attitudes and practices, particularly as they concern freight transport.One analysis is presented in Table 6.3. 229 The essential transition is from the "just-in-time" processes prevalent in the 1990s, which substituted tightly managed transport for inventory, to the less transport-intensive "just-incase" processes that are now emerging. The more Table 6.3 The post-'9/11' paradigm shift The open economy of the 1990s was chara cterized by: Facilitation Trade liberalization Asset concentr ation Interdependence The post-'9/11' siege economy is characterized by: Surveillance Controls/closed borders Decentralization Redundancy/loose co upling 224 Transport Department (1994), Freight Transport Study. 225 Figures 6.8 and 6.9 were presented by UIC at a press conference held in Paris on April 18, 2002 226 See "Europe to Asia rail link 'will rival shipping,'" Financial Times (London), April 20, 2002. 227 See "South Koreans invest in propping up the North," New York Times, April 28, 2002. 228 See Wehrfritz, G. (2001), "The Orient Express," Newsweek, Special Issue, July-September 2001. 229 Table 6.3 is from a presentation by Bahar Barami (2002), Productivity gains from pull logistics: tradeoffs of internal and external costs, presentation at a conference on "Transportation and Economic Development" organized by the Transportation Research Board of the US National Academies of Science, Portland, Oregon, May 5-7, 2002. 67
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Civic Exchange and the Asia Foundat
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7. THE DYNAMICS OF DECISION-MAKING
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SUSTAINABLE TRANSPORT IN HONG KONG:
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Page 100 and 101: AUTHORS Bill Barron (wbarron@hkucc.
Page 102 and 103: REFERENCES Airport Authority Hong K
Page 108: Civic Exchange Room 601, Hoseinee H
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