“Logistics is one of the main pillars of our services-oriented economy, and we are trying to highlight this to our American friends,” says Monica Chen, the director of the New York based Hong Kong Economic & Trade Office (HKETO)

Despite the fierce competition from Singapore and Shanghai, Hong Kong port and airport continue to be a busy and important link in the sea and air trade with China.

“The US is interested in Hong Kong’s logistics sector because of its extensive air and sea trade in our region where Hong Kong plays a key role in facilitating trade and shipping,” adds Chen who will soon be transferred to Hong Kong for some other assignment..

The US is Hong Kong’s second largest export market, behind only China. Hong Kong’s total exports to the US in 2009 amounted to US$36.6 billion in 2009. Hong Kong’s major export items include telecommunications equipment and parts, apparel, textile fabrics toys, games and sporting goods, footwear, jewellery, and travel goods and handbags.

On the other hand, the US is Hong Kong’s fifth largest source of imports. Hong Kong’s imports amounted to US$18.2 billion in 2009. Leading import items include semi-conductors and electronic valves and tubes, telecommunications equipment and parts, fresh or dried fruit and nuts, pearls, precious and semi-precious stones, aircraft and associated equipment, spacecraft and parts, and parts and accessories of office machines/computers.

US logistics and trading companies are also eyeing Hong Kong because of the Closer Economic Partnership Arrangement (CEPA), a de facto free trade agreement between Hong Kong and China, which allows a large number of Hong Kong products and services free entry into the mainland without being subjected to any duties.

“US companies come to Hong Kong to avail of the CEPA benefits.  The US trade and industry would also be interested in – and benefit from – a framework agreement signed between Hong Kong and Guangdong province in April. The agreement covers transportation, education, trade, etc.” Chen explained.

Hong Kong port, the world’s third largest container port after Singapore and Shanghai, moved some 21 million TEUs in 2009, according to Chen who expects trade and movement of goods with China to further grow upon completion of the Hong Kong-Zhuhai-Macau bridge in 2015/2016.  “The bridge, which connects the three most important points, will enhance traffic in the Pearl River Delta region.  This bridge will cater to some 50 million consumers in the region.”

Movement of goods and people will also be considerably accelerated with the completion of the hight-speed express link connecting Hong Kong and the major cities in China.  “This will drastically cut down the time in travel and transportation to China,” she maintains.

The direct shipping and transportation links established between China and Taiwan two years ago did cause heartburns in Hong Kong which benefited from the transshipment business.  Hong Kong served until 2008 as a transshipment port for trade between Taiwan and China.  The number of Taiwanese travellers visiting China via Hong Kong has dropped by some 20% but visits to Hong Kong from all over the world increased by 29%.

“Though Taiwan’s direct links with China have had some impact on Hong Kong’s transshipment business, we expect Hong Kong will benefit too from this development.  We are also promting our ties with Taiwan.  The Hong Kong Trade Development Council, our trade-promotion agency, recently opened an office in Taipei.  I expect this to have a positive effect on trade between Hong Kong and Taiwan,” Chen avers.

Chen is upbeat about Hong Kong’s development as a future wine hub.  Hong Kong’s Secretary for Commerce and Economic Development, Rita Lau, signed on May 17 a Memorandum of Understanding on cooperation in wine-related businesses with the visiting US Secretary of Commerce, Gary Locke. 

Chen predicted that the growing wine trade between the two sides would create a “sophisticated development” of special logistics for distribution and storage of wine. Wine imports from the US amounted to US$ 49 million in 2009-2010, representing a five-fold increase since Hong Kong’s duty exemption.  The US is, apparently, eyeing Hong Kong not only as a market – Hong Kong’s per capita wine consumption is very high --  but also as a strategic wine distribution centre for the huge China market..  Hong Kong has, meanwhile, overtaken London as the world’s second largest wine auction centre after New York.  Wine auctions in Hong Kong last year spiraled up to US$ 64 million while New York’s auction value totalled US$ 72 million.

US logistics companies have been closely monitoring Hong Kong airport’s cargo traffic in April 2010 which was the busiest month since 2007.  Indeed, April’s air-cargo volume went up by 38% over March.  The airport reported a 47% surge in exports in April, pushing the airport to its largest monthly cargo volume since November 2007.

Hong Kong handled 354,000 metric tons of air-cargo in April, a 38% increase over the year-earlier month.  With 230,000 metric tons accounting for exports, the outbound traffic.was the strongest since November 2007.  The number of cargo aircraft movements jumped to 4,080 movements, a 34.7% increase over the year-earlier month.