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A tale of two cities: Fragrant Harbour versus the Lion City

A tale of two cities: Fragrant Harbour versus the Lion City
Having just spent much of the week in Hong Kong conducting interviews for the annual Seatrade Hong Kong supplement one topic that came up regardless of sector was the rivalry with Singapore.

It was not that I was prompting the discussion either, in fact given I was researching a report profiling Hong Kong’s maritime industries it was not an issue on my agenda. However, it was certainly on everyone else’s, as I quickly found out.

The discussions varied from a pro-Hong Kong, sometimes mildly defensive stance of some, to those who were disappointed about the lack of government backing for the shipping and maritime industries with a sense that little had happened over the last 15 years or so with the Fragrant Habour stagnating while the Lion City roared ahead.

The Baltic Exchange and Xinhua recently launched the shipping centre index which put Singapore as number one with a score of 91.7, ahead of London in the second spot with 86.5 and Hong Kong in third place scoring 85.4. Yes, Singapore is number one according to the index, but Hong Kong’s ranking, just behind London, is hardly one indicative of a city that is declining in global importance in the maritime world.

What has happened is Singapore has been tremendously successful in attracting international shipowners and then trading houses to set up on its shores through a series of government incentive schemes, and with these have followed the related service industries. Ironically some of the earliest movers on the shipowning front into Singapore were Hong Kong-owners such as World-Wide Shipping (today BW Group) and IMC Group.

By contrast Hong Kong already had that strong core of shipowners and service industries and still does today. There has also been more growth than is obviously apparent and with the remarkable economic rise of China, Hong Kong has benefitted with many listed-maritime and shipping businesses from China. Many of its homegrown companies such as ship managers have also seen major growth in their businesses.

Would Hong Kong’s shipping industry welcome some more government support – the answer is certainly yes. And hopefully lobbying for this at a policy level is finally paying off, with a Chief Executive CY Leung who sees shipping as important component of the economy.

The reality is Hong Kong and Singapore are both thriving in the global maritime world as the Baltic Exchange index demonstrates, one as a longstanding regional player and the other a hub that has risen rapidly.