Could our road system cope with trucks hauling containers all over the territory? And is this what we want for Hong Kong? 5. In fact, Hong Kong’s position as an intermediate trading hub for Mainland China’s external trade has become more prominent over the past decades. In 1979, our trade intermediation activities (including logistics industry) accounted for about 15% of GDP and rose to 20% in 1990. Since China’s accession to the World Trade Organisation in 2001, direct competition from the Mainland has increased, but the pie has also grown much bigger. The total trade volume of the Mainland surged from $ billion in 2001 to $ trillion in 2013. And, while the percentage of trade being directly processed in Hong Kong has been trending downwards (from 30% to 10%) during the same period, the value of goods has risen  BIS central bankers’ speeches  1  sharply from $ billion to more than $ billion. Taking into account the fastgrowing offshore trade, the total value of trade in goods handled by Hong Kong would jump from some $ billion to $ billion during the same period. This shows that the trade creation effect is much greater than the diversion effect. Hong Kong’s trade intermediation activities (including logistics industry) amounted to $ billion in 2012, accounting for 25% of our GDP and employing 770,000 workers (21% of the total workforce).
Indeed, there is even a feeling among some that Hong Kong will inevitably be marginalised no matter what as Mainland China’s reform and liberalisation gathers pace and other Mainland cities bypass Hong Kong to establish direct trade and financial links with the world. 3. These people believe our future is doomed and would be eclipsed by the Mainland’s reform and liberalisation. They tend to look back with fond memories of the “good old days” in the 1980s and 1990s when Hong Kong was the sole gateway between Mainland China and the rest of the world. So, I pose this question – Is their reasoning sound? Will Hong Kong become irrelevant as Mainland China opens up? 4. First, let’s look at the changes in the role of Hong Kong as an intermediate trading hub for Mainland China over the past few decades. In 1979, Mainland China’s external trade amounted to a mere $ billion and container throughput amounted to just 30,000 to 40,000 TEUs, which were mostly processed at the Kwai Chung Container Terminal in Hong Kong. By contrast, in 2013, the Mainland’s external trade ballooned 140 times to $ trillion with container throughput up to 190 million TEUs. The throughput at Hong Kong’s container terminals increased more than 20 times from around 1 million TEUs in 1979 to 22 million TEUs in 2013. However, if the majority of the Mainland’s imports and exports continue to be routed through Hong Kong, how many additional container terminals would need to be built?