Hong Kong’s Future Development Direction: A Logistics and Trading Nexus

Hong Kong has always been a bridge through which the mainland engages in external trade, offering a two-way gateway for mainland enterprises looking to “go out” and overseas enterprises planning to expand their business in the mainland. The city has imposed relatively few restrictions on imports and exports and does not levy any customs tariffs. Given Hong Kong’s close trade relations with Europe and the US, overseas businesspeople are also more ready to come to Hong Kong to negotiate business deals. Moreover, Hong Kong boasts the most extensive international aviation network of all cities in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). With the commissioning of infrastructure facilities like the express rail link and the Hong Kong-Zhuhai-Macao Bridge, Hong Kong can be positioned as a major transport hub and built into an international integrated logistics centre.

Promoting People and Goods Flows

While the governments of the mainland, Hong Kong and Macao have implemented a green channel for the supply of fresh and live products from the mainland to the two territories, other food items are still subject to the usual customs declaration and clearance procedures. In the study on Hong Kong as the international business hub for the GBA¹, some respondents said they would like Hong Kong to collaborate with other GBA cities to devise and implement more customs facilitation measures, streamline customs declaration procedures in phases, and promote coordinated development with free trade zones on the mainland.

Respondents also called for more effort to be made to strengthen the transportation of production resources between Hong Kong and other GBA cities. In terms of the flow of people, Hong Kong should consider opening a green channel for cross-border vehicles, so that they can drive to Hong Kong airport. This would improve the experience for travellers using the airport. In addition, given the low utilisation rate of the Hong Kong-Zhuhai-Macao Bridge, Hong Kong could consider relaxing the vehicle quota and allowing trucks to use the bridge, thereby boosting passenger and freight transport between Hong Kong and other GBA cities. Although various transport infrastructure projects have been commissioned, the relevant software still needs to be improved. For instance, the application procedures for the Mainland Travel Permit for Hong Kong and Macao Residents could be further improved to encourage more people to travel across the boundary.

Given the limited local market and scarce land resources, it is difficult for Hong Kong to develop its own recycling economy. Moreover, the circulation of recycled materials (such as recycled plastic bottles) in the GBA is also impeded by the existence of three separate customs territories. Some respondents called on Hong Kong to draw up policies to support the recycling industry, and seek to streamline or standardise the systems in the different customs territories in order to foster the growth of the recycling economy and environmental industry in the GBA.

Leveraging Other GBA Cities’ Resources

Regarding air transport, some enterprises in the aviation industry suggested that Hong Kong could consider linking up the airport with the Hong Kong-Zhuhai-Macao Bridge and implementing taxation and customs clearance facilitation measures. This would enable businesses in Hong Kong to make more effective use of resources like manpower and land in other GBA cites and help ease resource shortages in Hong Kong. Such measures would also tie in with expansion plans for the airport and aviation industry and unleash the potential of the planned three-runway system and other completed transport infrastructures. Some respondents in the logistics and transport sector also called for differentiated development among GBA cities, whereby they can complement each other’s functions. While other GBA cities could provide land resources, Hong Kong could share its experience in logistics management. Hong Kong should therefore talk to other GBA cities about policies which would complement each other’s strengths.

Strengthening Product Testing and Certification Roles

Barriers on product certification between Hong Kong and GBA cities would be largely reduced if mutual recognition between Hong Kong’s product testing and certification system and the mainland’s China Compulsory Certification (3C) could be arranged. This would boost the coordinated development of the GBA while strengthening the connectivity of certification services between the two sides. Hong Kong should also try to draw up product standards, in particular for innovative services and products on which international testing standards have yet to be set. The Hong Kong government can work with private companies to design and formulate these new standards and promote them to the GBA and worldwide.

¹ For the background information about this report, please refer to the appendix in Hong Kong as the International Business Hub for the Greater Bay Area (Executive Summary).

_{The Chinese version of the report is prepared by PricewaterhouseCoopers Advisory Services Limited. The English version of the report is translated by the Hong Kong Trade Development Council based on the Chinese version. Should there be any inconsistency or ambiguity between the English and Chinese versions, the Chinese version shall prevail.}

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