Total port cargo throughput decreases 17%

In the first quarter of 2009, Hong Kong’s total port cargo throughput decreased 17% compared to a year earlier to 52.2 million metric tons.  Within this total, inward and outward port cargo dropped by 16% and 17% compared to a year earlier to 30.4 million metric tons and 21.8 million metric tons respectively.

On a seasonally adjusted quarter-to-quarter comparison, total port cargo throughput decreased by 10% in the first quarter of 2009.  Within this total, inward and outward port cargo fell 9% and 11% respectively.  Within port cargo, seaborne cargo dropped by 23% compared to a year earlier to 34.7 million metric tons, while river cargo decreased by 1% to 17.4 million metric tons in the first quarter of 2009.

In the first quarter of 2009, the port of Hong Kong handled 4.6 million TEUs of containers, representing a 20% decrease year-on-year.  Within this total, laden containers fell 21% to 3.8 million TEUs, while empty containers dropped 12% to 0.8 million TEUs.  Among laden containers, inward containers decreased by 20% to 1.9 million TEUs and outward containers also dropped by 22% to 1.9 million TEUs.

On a seasonally adjusted quarter-to-quarter comparison, laden container throughput decreased by 12% in the first quarter of 2009.  Within this total, inward and outward laden containers dropped by 11% and 13% respectively.

Seaborne and river laden containers decreased by 24% and 13% in the first quarter of 2009 over a year earlier to 2.7 million TEUs and 1.1 million TEUs respectively.
In the first quarter of 2009, the number of ocean vessel arrivals decreased by 21% over a year earlier to 7,520, with the total capacity decreasing by 5% to 94.5 million net registered tons.  Over the same period, the number of river vessel arrivals decreased by 11% to 41,340, with the total capacity decreasing by 9% to 22.7 million net registered tons.

E-commerce milestone achieved

A framework of suggestions to facilitate the pilot run of applications for mutual recognition of electronic signature certificates issued by Guangdong and Hong Kong came into effect June 5, marking a new milestone in e-commerce cooperation between the two places.

The Suggestions on the Framework for the Mutual Recognition of Electronic Signature Certificates Issued by Hong Kong and Guangdong were signed by the Permanent Secretary for Commerce and Economic Development (Communications and Technology) Duncan Pescod; the Director of the Department of Information Security Coordination of the Ministry of Industry and Information Technology (MIIT) Zhou Baoyuan; and the Director of the Department of Information Industry of Guangdong Province (GDIID) Wen Guohei in Beijing.

Mr. Pescod said with the Framework Suggestions in effect, certification authorities (CAs) and enterprises in Guangdong and Hong Kong will be able to launch research projects on the technology and business applications arising from the mutual recognition of electronic signature certificates, and move forward with pilot runs of applications in this field.

To promote trade and investment facilitation, ensure the security of electronic transactions and strengthen economic and trade cooperation, the two governments agreed to the Framework Suggestions as follows:

1. Electronic signature (or digital signature) is an effective means to ensure secure electronic transactions, with its legal effect clearly set out in the laws of mainland China and Hong Kong. The mutual recognition of electronic signature certificates (or digital certificates) between Hong Kong and Guangdong will enable the secure exchange of electronic information and facilitate electronic transactions between the two places.
2. The mutual recognition of electronic signature certificates between Hong Kong and Guangdong admits and respects the differences in the laws of both places in connection with the management of electronic signatures, as well as the differences in operation and certificate strategies among CAs on the Mainland and those in Hong Kong. The principles of equality, voluntariness, honesty, credibility, early pilot and steady progress will be followed.
3. Mainland CAs participating in the mutual recognition of electronic signature certificates need to obtain permission and registration in Guangdong; Hong Kong participating CAs need to have the recognition granted by the Government Chief Information Officer of the Government of the Hong Kong Special Administrative Region.
4. Mainland and Hong Kong participating CAs will actively select their partners, jointly identify pilot applications and submit the relevant information including work plans, technical solutions, major contents of the pilot applications, feasibility studies, desired outcomes and implementation schedules. They also will reach agreement on issues like certificate strategies, applicable areas and distribution of liability in respect of mutual issuance of certificates for the approval of the Guangdong-Hong Kong Working Group on Pilot Applications of Mutual Recognition of Electronic Signature Certificates and implementation after inclusion in the scope of the pilot applications. The applicable areas of electronic signature need to comply with the scopes of documents not applicable in the Mainland's Electronic Signatures Law and those not applicable in the Electronic Transactions Ordinance (Chapter 553, Laws of Hong Kong).
5. Representatives from MIIT, GDIID and Office of the Government Chief Information Officer (OGCIO) have set up the Guangdong-Hong Kong Working Group on Pilot Applications of Mutual Recognition of Electronic Signature Certificates, which coordinates pilot applications and the relevant issues.
6. The regulatory authorities in the two places should be responsible for regulating their local participating CAs to ensure the CAs can effectively fulfill their obligations under the pilot applications in accordance with the agreements signed by them that involve the conduct of electronic signatures. The regulatory authorities in both places should provide support for the relevant work during the pilot run.
7. MIIT and OGCIO should in a timely manner conclude the experience of the pilot applications and suggest incorporating the mutual recognition of electronic signature certificates into normal management procedures and practices in accordance with the progress of the pilot run.

The Framework Suggestions were formulated pursuant to the requirement to take forward the pilot run of applications of mutual recognition of electronic signature certificates issued by Guangdong and Hong Kong proposed under the Supplement V to the Mainland and Hong Kong Closer Economic Partnership Arrangement in July 2008.

Business aircraft service company expands

On May 27, TAG Aviation Asia, a subsidiary of Switzerland’s TAG Aviation Holding, officially announced the business expansion of its aircraft charter, aircraft management, aircraft completion monitoring and aircraft brokerage services in Hong Kong. The company has hired additional staff and moved into a larger office in Wanchai in a response to growing demand for its services.

Established in Hong Kong in 2006, TAG Aviation Asia is responsible for the Asian expansion of parent company TAG Aviation's global business aircraft services. It offers its clients the benefits of centralized aircraft operations support and local service to Asian clients and joins a network of TAG subsidiaries around the world in locations in the U.S., Europe and the U.K. The company currently operates more than 200 business aircraft worldwide and is considered an industry-leader with more than 40 years’ experience.

CEO of TAG Aviation Asia, Neil Gibson, said, “TAG Aviation Asia’s business plan for Hong Kong is long-term. We have significantly invested in our people and infrastructure locally. This city is the ideal starting point for our strategic expansion in Asia, and as we continue to grow in the future, Hong Kong will remain our regional headquarters.”

Director-General of Investment Promotion at Invest Hong Kong, Simon Galpin, welcomed the company’s business expansion. He said, “TAG Aviation Asia's continued investment and expansion in our city is an illustration of the opportunities in, and strong support of, Hong Kong's aviation industry.”

TAG Aviation Asia was granted the Hong Kong Air Operator's Certificate (Hong Kong AOC) by the Civil Aviation Department. This official document is issued to a local airline/business jet operator and attests to the airline/business jet’s competence regarding its ability to secure a safe public transport service using the particular type of Hong Kong registered aircraft specified in the Hong Kong AOC.

ALDO puts best foot forward in Hong Kong

Canadian fashion shoes and accessories retailer, ALDO Group entered the Hong Kong market by opening of its first flagship store at the IFC mall in Central on May 25.
The group’s portfolio includes six different brands with ALDO being the flagship brand and the one to make the first foray into the Hong Kong retail scene. The ALDO store at the IFC mall will offer a wide product range of women's and men's shoes, accessories and handbags to cater to every consumer’s fashion needs.

ALDO’s International Brand Director, Martin Ku, is excited about the company’s new establishment in Hong Kong. “Hong Kong is famous for its fashion sense and trends. People from around the region, especially those from mainland China, are traveling to Hong Kong to see the latest trends in the market,” said Mr. Ku. “Our presence in Hong Kong will no doubt help us establish ALDO’s on-trend, young and stylish brand image in Asia.”

Director-General of Investment Promotion at Invest Hong Kong, Simon Galpin, welcomed the opening of ALDO’s store in Hong Kong. “Our city has a great reputation as Asia’s shopping paradise and our 29 million-plus visitors a year is testament to that. It is the continued establishment of new brands from around the globe in Hong Kong that helps us maintain our status as the region’s favorite shopping destination. We are delighted to assist and welcome brands like ALDO to our city as their presence adds to the variety and choice available for Hong Kong's consumers, local and visiting alike,” he said.

Airlines see drop in May traffic

The combined May traffic figures for Cathay Pacific and Dragonair show a significant fall in passenger numbers compared to the same month last year and another marked drop in the amount of cargo and mail carried.

In May, the two airlines carried a total of 1,950,344 passengers — a 7.5% drop compared to the same month in 2008 — while the load factor dropped by 1.6 percentage points to 75.8%. Capacity for the month, measured in available seat kilometers (ASKs), fell by 4.7%. For the year to date, the number of passengers carried is down 1.3% against a capacity decline of 0.7%.

The two airlines carried a total of 121,966 metric tons of cargo and mail last month, down 13.3% year-on-year, while the cargo and mail load factor rose by 1.2 percentage points to 68.2%. Capacity for the month, measured in available cargo/mail tonne kilometers, fell 15.7%. For the year to date, tonnage has fallen by 16.5% compared to a capacity drop of 14.0%

Traffic volumes at HKIA decline

Hong Kong International Airport handled 3.6 million passenger trips and 259,000 metric tons of cargo in May, representing decreases of 12.7% and 17.6% from the same period of last year respectively. Air traffic movements also dropped 9.1% to 23,435.

The double-digit drop in passenger volume was across the board with all traffic types, but it was mainly due to decreasing visitor traffic, which fell more than 20% in May compared to the same period last year.

Markets experiencing pronounced drops were South East Asia, mainland China, North America, Taiwan and Japan. On the cargo side, the continuing shrinking markets of the U.S. and Europe accounted for May’s weak export figure, which experienced a more than 20% year-on-year decline. During the same period, imports declined 15% while transshipment traffic dropped 9%. 

“In May, both air traffic movements and passenger throughput recorded significant drops, more than the average declines of 5.9% and 4.3%, respectively, for the first four months of 2009,” said Chief Executive Officer of the Airport Authority Hong Kong Stanley Hui. “The negative performance reflected largely the impact of continuing global recession and the new but serious impact of Influenza A(H1N1) virus, further weakening the aviation market and resulting in airlines reducing flight frequencies. This prevailing trend in passenger traffic and air traffic movements is expected to continue and will likely further deteriorate in June.”

The number of passenger trips and cargo tonnage in the first five months of 2009 fell 6% and 21.1% over the same period last year, to 19.1 million and 1.2 million respectively. Air traffic movements slid 6.6% to 116,795.

HKTDC downgrades export forecast

The Hong Kong Trade Development Council (HKTDC) has revised downward its forecast for Hong Kong exports, predicting a 10% to 12% drop for 2009. 

An article in the HKTDC Trade Quarterly (TQ), published June 16, notes that the revision from the previously estimated decline of 6% is due to worse-than-expected world trade. The new forecast predicts that Hong Kong exports will perform at their lowest level since 1954. 

While overseas buyers have begun to place small orders to replenish their merchandise, a more stable external trade environment can only be expected in the second half of the year, according to the HKTDC. 

“A drastic inventory drawdown by overseas buyers, amid falling consumer demand and an appetite for low-priced products, has led to the increasing price pressures observed since the global financial crisis emerged,” said HKTDC Chief Economist Edward Leung. 

The TQ report found one bright spot. The HKTDC Export Index, which monitors export performance and prospects of Hong Kong traders, rebounded strongly, to 42.9 for the second quarter, up from 25.8 in the first quarter. 

The Export Index, based on a quarterly business confidence survey covering Hong Kong's major industries, may signal a slower rate of contraction in exports. The 21% plunge in Hong Kong exports during the first four months of 2009, however, remains a concern, according to Mr. Leung. 

Looking ahead, Mr. Leung said sales would probably return to normal growth with global economic recovery. This would hinge, however, on normal functioning of the global banking and credit systems, a bottoming out of the United States housing market and a revival of business and consumer confidence in developed economies. 

Mr. Leung said the global economy could bottom out in the second half of the year, if various rescue initiatives taken by world governments take effect. He said the greatest medium-term challenge was to avoid prolonged global recession. This would mean rebalancing excessive savings in Asia against overspending in the U.S. and other rich countries. Intensified protectionism and the outbreak of human swine flu may also threaten the global economic landscape, Mr. Leung added. 

A survey conducted by the HKTDC in March found that 33.4% of 500 Hong Kong companies with production, merchandising or marketing activities in the Mainland had already begun to do business on the Mainland. Among those not yet doing so, more than 30% said they would enter, or will consider entering, the Mainland market within the next six months.