The shipping industry has developed since the opening of Hong Kong, and has a history of more than one and a half centuries.
As one of the largest shipping centers in the world, Hong Kong is a gathering place for shipowners, shipping companies and shipping services. By the end of 2021, Hong Kong’s merchant shipping fleet accounted for 9.8% of the world’s total. The shipping ecosystem was booming, with more than 900 shipping related companies developing in Hong Kong and providing various maritime services.
The outline of the development plan of Guangdong Hong Kong Macao Bay Area officially released in February 2019 clearly states that will consolidate and enhance Hong Kong’s position as an international shipping center and support Hong Kong’s development of high-end shipping services such as ship management and leasing, ship financing and maritime dispute resolution .
In recent years, the HKSAR government has actively promoted the development of high-end maritime services. At the 2020 Pan Pearl River Delta regional cooperation chief executives’ joint meeting, the chief executive of the Hong Kong Special Administrative Region, Mrs Carrie Lam, said that the SAR government has been actively strengthening Hong Kong’s role in promoting the construction of Guangdong Hong Kong Macao Bay area, focusing on promoting Hong Kong’s high value-added maritime services. Mrs Lam stressed that professional services were Hong Kong’s strengths, especially in the financial and legal areas.
\u3000\u3000 “Over the past five years, the HKSAR government has continuously improved the competitiveness of the shipping industry. As a gateway to South China, Hong Kong is a hub connecting the shipping industry at home and abroad. At the same time, Hong Kong’s shipping industry has many traditional advantages, including a simple and low tax system, an open capital account and a legal system. Therefore, I think Hong Kong is still the most attractive place in the world to develop the shipping industry One of the largest cities in the world, “said Bjorn hojgaard, former chairman of the Hong Kong Shipowners Association and CEO of Anglo Eastern univan group.
From 2001 to 2021, the size of China’s shipowner fleet increased from 27.9 million gross tons to 217.7 million gross tons, and the size of the fleet increased by 7.8 times China Merchants Energy Shipping Co.Ltd(601872) general manager Wang Yongxin pointed out: “at present, the fleet size of Chinese shipowners accounts for 15% of the global fleet (excluding China’s huge inland fleet). It is the second largest ship owner in the world and gradually narrowing the gap with Greek Shipowners, marking the rise of Asian power centered on China in the global shipping blueprint.”
In fact, as the world’s most important shipping focus, the Asia Pacific region accounts for more than half of the world’s total economic activities, which is very important to the development of world shipping. With the shipping industry “spreading from the west to the East”, in November 2019, after some incentive competition, Hong Kong finally stood out. The international shipping association chose Hong Kong to set up its first overseas office in nearly a century. Liu Yang, chief representative of the International Shipping Association (China) office, said frankly: “this is a great achievement made by Hong Kong’s shipping industry in the more than 20 years since Hong Kong’s return.”
As a major international trade association in the shipping industry, the members of the international shipping association include National Shipowners’ associations in Asia, Europe and the Americas and the Hong Kong Shipowners’ Association. The ships operated by its member shipping companies account for more than 80% of the world’s merchant tonnage. Therefore, as the representative of ship owners, the international shipping association can play an important role in influencing government regulators (such as the International Maritime Organization) and have a great impact on the development of the shipping industry.
Liu Yang pointed out that Hong Kong is not only an important city in China, but also an international shipping center under “one country, two systems”. It is undoubtedly the best option for the Asian office, which can optimize efficiency and maximize purpose. He stressed that Hong Kong’s premise for developing high value-added maritime commercial services must have a complete maritime industry cluster, and its core is the clients of maritime business, including ship owners, ship brokers, ship managers and cargo owners . To this end, the SAR government needs to formulate a long-term and comprehensive development strategic plan for the shipping industry and define Hong Kong as an international shipping center “shaping the future of the shipping industry”.
p align = “center” maritime financing demand recovery
Covid-19 epidemic is spreading all over the world. In 2020, ship owners tend to be cautious in ship investment decisions, and the investment in new shipbuilding has fallen to a five-year low. However, with the orderly development of vaccination work around the world, the demand brought by economic recovery began to appear, and the shipping industry financing market ushered in the dawn. According to the statistics of the Hong Kong Monetary Authority, by the end of 2020, the total amount of shipping loans in Hong Kong was about HK $129 billion, accounting for nearly 2% of the total bank loans in Hong Kong.
“(the demand for financing and leasing of large-scale ships increased significantly in the global shipping market in 2021, which represented a significant increase in the demand for financing and leasing of large-scale ships.” Zhao Kuo, head of shipping finance department of maritime business of ICBC Financial Leasing Co., Ltd., pointed out.
Since its establishment in 2007, ICBC leasing takes ship assets as the starting point, gives full play to the comprehensive operation advantages in the field of maritime business, relies on the professional asset operation and management ability, and escorts the safety of national strategic resource transportation through innovative business model. At present, the scale of maritime financial leasing assets leased by ICBC exceeding 100 billion yuan ranks first among Chinese financial leasing companies and fifth among global maritime financing institutions. The company has a fleet of more than 350 ships and its business covers more than 70 customers in more than 20 countries and regions around the world.
Zhao Kuo said frankly: “The impact of the epidemic on the aviation industry is far greater than that of the shipping industry. Therefore, foreign banks’ interest in ship financing has further increased. The China Cssc Holdings Limited(600150) leasing industry is facing more fierce competition than before the epidemic. The ship leasing industry needs a more flexible structure to face the competition from all aspects of financing sources. At the same time, leasing companies should seek financing that is different from traditional financing and more in line with the market Market demand for shipping financial services. “
Wang Yongxin said that European banks have significantly reduced the scale of shipping assets since 2008, while banks in Asian countries and other emerging market countries are increasing their investment in shipping assets. The share of policy banks, export credit, leasing and other alternative financing increased.
It is understood that among the top 20 major financing institutions in the world, there are 2 Bank Of China Limited(601988) , 3 Chinese leasing companies. After ten years of development, China’s shipping leasing companies have a total fleet size of 128.9 million gross tons. The stock fleet accounts for 8% of the global fleet size, and undelivered ships account for 10% of the global orders on hand. Ship financial leasing has become the second largest ship financing channel after bank loans. China’s leasing has also become the focus of market attention in the global shipping market.
On October 25, 2021, the first “sustainable development related syndicate” loan of China Merchants financial leasing (Hong Kong) Holdings Co., Ltd., an overseas subsidiary of China Merchants leasing, was signed and landed in Shanghai. This loan is the first green concept loan of the company using the related structure of ESG sustainable development indicators.
\u3000\u3000 “This loan reflects Hong Kong’s biggest advantage in shipping financial services: domestic and foreign linkage. Shipping is a capital intensive industry and has a two-way interactive relationship with finance. Hong Kong is one of the international financial centers with a good foundation in shipping services and an international ship financing center in Asia. There are a large number of financial institutions providing ship financing and strong linkage at home and abroad , diversified organization types, low capital cost, abundant capital, and less liquidity pressure on shipping enterprises .
”Wang Yongxin pointed out.
p align = “center” “back to the motherland, facing the world”
The outline of the development plan of Guangdong Hong Kong Macao Bay area clearly puts forward the need to consolidate and enhance the status of Hong Kong as an international shipping center. Wang Yongxin believes that compared with other shipping centers such as London and Singapore, Hong Kong’s most unique advantage is “relying on the motherland and facing the world”, “Hong Kong has professional advantages in Maritime Arbitration and maritime finance. In the future, the development of Hong Kong’s shipping center should be closely combined with the mainland market.”
\u3000\u3000 “As a platform for the mainland economy to” go global “, Hong Kong has the advantages of high openness and high internationalization. It plays an important role in the overall planning of Dawan district. It is a link and bridge connecting the mainland urban agglomeration of Dawan district and the international community. Through the mutual support and integration of equity, capital, technology and services, Hong Kong will drive Dawan district to build a world-class port cluster “Airports and high-end shipping services,” he said.
Talking about the unique advantages of Hong Kong’s shipping industry, Zhao Kuo pointed out: “Hong Kong is one of the world’s shipping centers. Under the” one country, two systems “system, Hong Kong has unique advantages. Hong Kong can provide professional financial and legal services for Chinese leasing companies, as well as tax concessions. In addition, Hong Kong has created a competitive policy and legal environment for ship leasing and financial leasing, and shipping related consultation Consulting services and ship management have also developed very mature. “
In order to build Hong Kong into a ship leasing center in the Asia Pacific region, the Hong Kong government established a ship leasing task force under the maritime ports bureau at the end of 2018 to study and promote the ship leasing industry in Hong Kong. Over the past decade, Hong Kong’s transport loans and advances have increased significantly at an annual rate of 8.6%. As of December 2020, the total amount reached about HK $129 billion. Eight of the world’s top 10 bookkeepers of syndicated loans for ship financing have set up offices in Hong Kong.
In terms of financing support, Hong Kong is the region with the largest concentration of shipping financial institutions after London and Singapore. Zhao Kuo revealed that at present, about a quarter of the project financing of ICBC’s leasing and shipping business comes from Hong Kong. At present, the vast majority of the company’s overseas business is held through the Hong Kong platform company.
All ships and goods must be insured before completing the voyage. Therefore, maritime insurance is an important part of the shipping industry. “The marine insurance industry based on hull and machinery insurance, cargo insurance and P & I insurance also has a deep foundation and policy advantages in Hong Kong. By the end of 2021, there were 84 authorized marine insurance companies in Hong Kong, including 32 foreign-funded marine insurance companies. In addition, the international P & I Association group (Ig) Of the 13 member associations, 12 have offices in Hong Kong, and the Hong Kong Branch of the Chinese shipowners’ mutual insurance association makes Hong Kong the second largest P & I Insurance Center in the world outside London, “Liu said.
\u3000\u3000 “Hong Kong links the global logistics demand side and transportation service side, and plays an irreplaceable role in the global shipping industry. Especially in the implementation of the national” double cycle “strategy, Hong Kong can give full play to the advantages of free trade port, radiate the economic development of the Great Bay area to the whole country and even the whole Asia, and become an important area for the global IOT network and economic convergence. The Great Bay area is also Hong Kong’s development into the world’s most important shipping center provides strong conditions, “Zhao Kuo pointed out.
p align = “center” maritime legal service center
Ship registration is another remarkable achievement of Hong Kong’s shipping industry with the reform and opening up. In 1990, Hong Kong established an independent “Hong Kong ship registration” system. As of December 2020, about 2600 ships have been registered with the Hong Kong ship registry, with a total of 130 million gross tons. In addition, Hong Kong is by far the fourth largest ship registry in the world, behind Panama, Liberia and the Marshall Islands.
In Liu Yang’s view, in addition to the financial and shipping center, an important role of Hong Kong in the national strategic planning is the international legal and dispute resolution service center, “Hong Kong maritime legal services are needed from the formulation of new ship building contracts to the trading of second-hand ships, from the review of ship financing contracts to the daily operation of ship management, from maritime insurance disputes to the settlement of disputes over ship leasing, maritime accidents and personal casualties.”
The shipping industry undertakes 90% of the world’s international trade, and the demand for maritime legal services is very diverse. Li Lianjun, a partner of the firm, pointed out that under the “one country, two systems” arrangement, Hong Kong is the only common law jurisdiction in China.
It is understood that Hong Kong has signed many important international maritime rules and conventions, which are part of Hong Kong’s maritime law. As an associate member of the international maritime organization, Hong Kong has played an influential role in international discussion forums on shipping conventions. In addition, according to the basic law, Hong Kong can enact its own legislation on shipping. Hong Kong’s maritime law is internationally recognized as the most advanced and up to the highest level.
Benefiting from the long history of maritime development in Hong Kong, the high court of Hong Kong has specially set up a maritime case trial table to deal with different types of maritime litigation. The trial list of maritime cases is in the charge of dedicated maritime case judges to ensure that complex maritime disputes are properly handled by senior judges.
At the same time, Li Lianjun pointed out: “Hong Kong has an open legal system, and Hong Kong is a convenient place for mainland clients to arbitrate. Hong Kong has a close relationship with the mainland, and Hong Kong’s legal system has the advantage of bilingual Chinese and English. It follows the legal principles of judgments on shipping and maritime contracts under the common law system, is open and transparent, and provides legal and business support for shipping companies operating in Hong Kong all over the world Guarantee “
Since the New York Convention applies to Hong Kong, Hong Kong’s arbitral awards can be enforced through the courts of most trading economies in the world. At the same time, Hong Kong has reached a number of two-way agreements with the mainland, which can allow mainland enterprises to come to Hong Kong for arbitration, becoming the only place outside China that can directly conduct legal arbitration with the mainland. Since the arrangement for Mutual Enforcement of arbitral awards between the mainland and Hong Kong came into force in 2000, arbitral awards in Hong Kong can also be enforced in the mainland.
In September 2020, the Baltic International Maritime Commission (BIMCO) officially approved Hong Kong as the fourth designated place of arbitration, demonstrating its full trust in Hong Kong’s legal system.
In addition, the arrangement on mutual assistance and preservation between the courts of the mainland and the Hong Kong Special Administrative Region in arbitration proceedings signed between Hong Kong and the mainland has entered into force on October 1, 2019. A party to a Hong Kong arbitration procedure administered by a qualified and appointed Hong Kong arbitration institution may apply to the mainland court for protective measures when Hong Kong is the place of arbitration.
“The institution that chooses to conduct arbitration in Hong Kong can preserve evidence in the mainland before arbitration. In this regard, Hong Kong is unique. We can get the guarantee before arbitration, which often leads to the settlement of the parties.” Li Lianjun said frankly.
With these unique advantages, Hong Kong has become a major maritime arbitration center in Asia. According to the data, in 2020, the Hong Kong International Arbitration Center handled 483 new cases, of which 18.6% involved maritime disputes.
