Hong Kong loses to another Chinese port city as container volume grows in busier northern rivals

Daniel Ren

Another Chinese port city has risen in the rankings of the world’s busiest ports in terms of container throughput, while Hong Kong slipped again amid a political and economic crisis.

The port of Qingdao in northern Shandong province handled 19.2 million twenty-foot equivalent units (TEUs) in the first 11 months of this year, according to the Ministry of Transport. That represents a 9 per cent increase from the same period in 2018.

Hong Kong’s container port moved 16.8 million boxes in the January-to-November period, a 6.2 per cent drop from a year earlier, according to the Hong Kong Maritime and Port Board.

The latest statistics should lift Qingdao to seventh busiest in the world, based on the list compiled by the World Shipping Council. Mainland ports in Shanghai, Shenzhen, Ningbo, Guangzhou, Qingdao and Tianjin were among the 10 busiest in 2018. Hong Kong fell to eighth, having slipped two rungs to seventh in 2018.

Hong Kong drops out of top five busiest ports in world for first time in 2018

Apart from the five mainland port cities – Shanghai, Shenzhen, Ningbo, Guangzhou, Qingdao – Singapore and Busan in South Korea have also surpassed Hong Kong in terms of container throughput since last year. The city’s position will continue to come under threat as China embarks on yet another massive mission this month.

While the city’s role has diminished in recent years, the slide has worsened amid the crossfire of anti-government protests and US-China trade war. Container throughput has slumped for a 22nd straight month in November, most recently mirroring dwindling exports.

“Mainland ports, with state support, can still manage to combat a sharp fall in business volume by reducing handling fees to attract more liners,” said Xiong Hao, an assistant general manager at Shanghai Jump International Shipping. “For them, the negative impact from a global slowdown and trade war can be somewhat offset by incentives to bolster domestic trade.”

Beijing had invested an estimated 1 trillion yuan (US$143 billion) since 2012 to expand the nation’s ports, according to a Shenwan Hongyuan Securities research report earlier this year. The government has also pledged to slash handling and harbour dues to attract shippers, it said.

Strength in domestic demand, which contributed 60 per cent of China’s economic growth this year, would continue to underpin the country’s shipping business, said Steve Huang, chief executive of DHL Global Forwarding’s Greater China operations.

Shanghai readies duty-free customs area to facilitate global trade-in move to bypass Hong Kong

It has approved a duty-free zone at Shanghai’s Yangshan deep water port and Lingang, which cover 137.8 sq km (53.2 sq miles), not too far away from the site of American car maker Tesla’s new factory. The area is larger than Kowloon and Hong Kong Island combined, and is seen as China’s biggest step yet to bypass Hong Kong in sea-route trade.

The phase one trade deal between the US and China is likely to the balance in favour of mainland ports, according to Tommy Wu, senior Asia economist at Oxford Economics in Hong Kong.

“As Beijing pledges to import more goods from the US, it will buy the goods directly from the US, rather than via Hong Kong,” he said. “The truce will benefit mainland ports more than Hong Kong.”

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