You have held your role as the Secretary for Transport and Logistics since 2022 – what have been some of your key challenges and successes during this time in this Bureau?

Hong Kong, like other cities in the world, is facing competition both in our region but also internationally, when it comes to the global industries of aviation and maritime. We need to be brave, we need to be proactive and we need to be forward looking.

We are a busy team with a portfolio that covers internal and external transport, including for aviation, rail, maritime transport, cargo ports and logistics. But taking aviation as an example, we only opened our borders post-COVID in January last year as recovery for Hong Kong has been slower, when compared to other parts of the world. Despite this we have recovered quickly. Both passenger traffic and flight movements during the peak travel season have returned to 80% of the pre-pandemic levels, and passenger traffic is expected to fully recover to pre-pandemic levels by the end of this year. For cargo traffic movement we still maintain our number one position in the world, which we’ve held for 13 out of the past 14 years. Our ambition is to keep this position, but competition is always high.

Can you go into more detail on your plans to boost aviation freight cargo?

To remain competitive with neighbouring cities regarding air freight, we are developing the Three-Runway System at Hong Kong International Airport (HKIA). This should increase the cargo handling capacity to 10 million tonnes from 2035 onwards. 

If the capacity is not the problem, it instead becomes, where can I get the cargo? We have to use our extensive air network, reaching some 180 destinations – that is our asset. As is our International Air Transport Association (IATA) certification to handle temperature-controlled air cargo for pharmaceuticals, fresh produce, live animals, and lithium batteries. This is a strength we have to rely heavily on – no matter what people want to deliver we should be able to do that. 

We are also developing a sea-air intermodal cargo transshipment mode and setting up a logistics park across the border in Dongguan. Under this mode, export cargo from the Mainland can go through security screening, palletisation and cargo acceptance in advance in the upstream logistics park. It will then be transported by sea to the airside of Hong Kong International Airport (HKIA) seamlessly for direct air transshipment to overseas destinations, without the need to undergo security screening again at HKIA, thereby further enhancing the time efficiency and cost effectiveness. 

How does maritime factor into Hong Kong’s plans for future growth? 

The maritime and port industry is an important component of Hong Kong’s economy and facilitates the growth of its logistics industry, one of the most significant four pillar industries for us. In late 2023 we completed a ‘health check’ for our maritime business and logistics areas and have developed two action plans. For shipping, a core focus will include the development of Hong Kong as a green and smart port, as well as developing high value-added maritime services and strengthening and promoting talent. We expect in following these action plans we will maintain Hong Kong’s status as a key international maritime centre and premiere logistics hub. 

What do your plans for green and smart ports entail? 

Our port offers a number of advantages in the region as we are a free port, have fast custom clearance and are the only area inside China that practises common law. But we acknowledge we are also more expensive than some due to our high living standards and costs and salaries. We knew we must make our ports attractive and competitive, and this means developing plans for green and digital ports.  

For our green plans, we are proactively facilitating the provision of LNG bunkering services to serve ships that will be using this interim fuel. We aim to commence towards the end of this year or beginning of next year. We are also developing plans to be able to provide bunkering services for next generation fuels, such as methanol and ammonia.

We have seen the impact geopolitics has had on shifting trade routes in recent years and a greater use of transhipment hubs. How are you seeing this impact on Hong Kong? Particularly as mainland China increases its exports. 

Hong Kong has been a premier logistics hub in the region. In the past, Mainland China was less experienced in international trading so Hong Kong has been the gateway for manufactured goods to be exported to the rest of the world from the Mainland. The Mainland has since learned and developed fast. However, Hong Kong is part of the Greater Bay Area (GBA), which, comprising nine mega cities of Guangdong province as well as the Special Administrative Region (SAR) of Macao, is regarded as one of the economic powerhouses that propels China’s economy (the other being the Yangtze River). As part of this, we have access to a huge market with a population of more than 86 million and a lot of key manufacturing bases just adjacent to Hong Kong. It creates major opportunities and logistics demand that our cargo ports and airports can serve, which can further consolidate and enhance Hong Kong’s status as the premium logistics hub in the region.

Both the government and industry have to work hand-in-hand. Many of our logistics companies are SMEs, and sometimes they wish to expand but may find bottlenecks due to a lack of investment or vision. We, the government, must provide support to them. We do this with match funding to help them become modern, digitalised logistics firms to help them meet the changing prospects in front of us. This includes e-commerce, with its emphasis on speed and efficiency – something Hong Kong is already known for but is building on for future demands. There is an old-fashioned idea of logistics as moving something from A to B. It is no longer as simple as that. Today, there is a demand for traceability and digital data transfer. 

We also provide training and subsidies to our logistics sector to meet the prevailing demand for ESG in the market. As everywhere in the world, we are also looking for talent and the right skills.