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Impact of cabotage relaxation in mainland China on the transshipment hub of Hong Kong

Author

Listed:
  • W. H. Wong

    (Hang Seng Management College)

  • E. Wong

    (Hang Seng Management College)

  • D. Y. Mo

    (Hang Seng Management College)

  • L. Leung

    (Hang Seng Management College)

Abstract

Hong Kong has benefited from China’s cabotage rule, as foreign ships loading at a Chinese port can transit to Hong Kong and then call at another Chinese port. However, in 2013, China’s cabotage policy was relaxed in Shanghai—whereby China-owned, foreign-flagged vessels are allowed to operate out of Shanghai to other coastal ports of China. In this paper, we examine the potential loss of transshipment traffic in Hong Kong due to cabotage relaxation. Via a transshipment model and based on secondary data, we are able to derive a potential loss to Hong Kong’s throughput, on the order of 14%. This effect is not unique to Hong Kong: in general, in other parts of the world, there are also maritime hubs located near the coastal ports of other countries, and the effects of cabotage relaxation are similar. From a regional collaboration perspective, such as that of the Belt and Road Initiative, it is essential for different governments to review their cabotage policies together.

Suggested Citation

  • W. H. Wong & E. Wong & D. Y. Mo & L. Leung, 2019. "Impact of cabotage relaxation in mainland China on the transshipment hub of Hong Kong," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 21(4), pages 464-481, December.
    • Handle: RePEc:pal:marecl:v:21:y:2019:i:4:d:10.1057_s41278-018-0112-1
    DOI: 10.1057/s41278-018-0112-1
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    References listed on IDEAS

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    1. Robert A Cochrane, 2008. "The Effects of Market Differences on the Throughput of Large Container Terminals with Similar Levels of Efficiency," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 10(1-2), pages 35-52, March.
    2. Zheng, Jianfeng & Meng, Qiang & Sun, Zhuo, 2014. "Impact analysis of maritime cabotage legislations on liner hub-and-spoke shipping network design," European Journal of Operational Research, Elsevier, vol. 234(3), pages 874-884.
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    5. Verena Flitsch & Nico Herz & Jutta Wolff & Alfred J Baird, 2014. "Maritime policy in the North Sea region: Application of the cluster approach," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 16(4), pages 484-500, December.
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    Cited by:

    1. Edmund Y. Wu & Danny C. K. Ho & Stephen C. H. Ng & Lawrence C. Leung, 2023. "Uniqueness, complexities, and research issues of logistics and trade facilitation in Greater Bay Area of China," Journal of Shipping and Trade, Springer, vol. 8(1), pages 1-22, December.

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