Hong Kong is taking active measures to strengthen its position as a leading international shipping and aviation center in the new century, a senior government official said on December 30.

As a leading international air and sea cargo hub, Hong Kong has good reasons for international cargo businesses to choose it as their base of operation, said Secretary for Economic Services Stephen Ip.

"Hong Kong's open markets, pro-business culture, excellent communication networks and world-class financial facilities make it an ideal base in which to do business," he said.

China's imminent entry to the World Trade Organization (WTO) means more trade going through Hong Kong into and out of China, which will boost Hong Kong's shipping and air services industry, Ip said.

To secure Hong Kong's position as an international air and sea cargo hub and gateway to the Chinese mainland, the Hong Kong Special Administrative Region (HKSAR) government is planning measures to increase Hong Kong's competitive edge, Ip said.

Hong Kong is ranked the sixth largest maritime center in the world, after Greece, Japan, Norway, the United States and the Chinese Mainland.

Hong Kong shipowners control over six percent of world tonnage amounting to over 34 million gross tons. There are some 1000 shipping related companies operating in Hong Kong which provide ship management, brokerage, finance, insurance, arbitration, legal, naval architecture and ship surveying services.

To make the Hong Kong shipping sector more competitive, a package of measures have been introduced recently to make registration under the Hong Kong Shipping Register more attractive, competitive and user friendly, according to Ip.

Hong Kong has reduced ship registration fees by an average of 50 percent and introduced a simplified survey cycle that will again reduce costs. The two measures have provided significant savings to shipowners in the first year of registration under the Hong Kong flag.

Moreover, owners of Hong Kong ships are not required to pay any tax on profits made overseas, and they are also exempted from paying any tax on profits made on cargo uplifted from Hong Kong, he said.

Ip pledged to conclude double taxation relief arrangements with Hong Kong's trading partners to exempt owners of Hong Kong ships from paying any freight tax levied on cargo uplifted from overseas.

The container ports of Hong Kong are among the busiest in the world, handling an estimated 15.6 million TEUs with 460 liner services per week to 170 destinations in the world.

Figures released recently by the Census and Statistics Department showed that in the third quarter of 1999, the port cargo throughput in Hong Kong increased by six percent over a year earlier to 43.4 million tons, with outward port cargo showing a significant growth of 19 percent to 17 million tons.

To further raise the cargo handling capacities of the Hong Kong ports, Ip said that construction work for Container Terminal 9 will commence early next year to provide an additional 2.6 million TEU capacity by 2004.

In addition to terminals, Hong Kong provides the option for small and medium-sized ships to load and upload containers more economically in mid-stream. The River Trade Terminal at Tuen Mun provides a custom-built facility to meet the needs of the growing river trade. the needs of the growing river trade.

Apart from operating the world's busiest container ports, Hong Kong is also operating the world's busiest air cargo hub, handling nearly 2 million tons of air cargo in 1999.

In November 1999, Hong Kong International Airport (HKIA) handled a total of 201,000 tons of cargo, a 27.6 percent increase over the same period last year. The number of passengers also increased by 13.2 percent to a total of 2.577 million, largely thanks to the recovery of the Asian economies.

To further boost competitiveness of HKIA, the Hong Kong Airport Authority (AA) proposed last September a 15 percent reduction in landing and parking charges for all aircraft at HKIA, which will come into effect from January 1, 2000.

In addition, a number of user friendly measures were announced, including the provision of trolleys in the airside area, the introduction of duty free shopping for arrival passengers, the offer of half-hour free parking, and the launch of a discount for passengers who park their car at the airport.

The AA is also inviting interested parties to set up logistics centers and a maritime cargo transfer center in the airport zone, in a bid to strengthen Hong Kong's position as an international air cargo hub.

The AA will work closely with its business partners and the government to further improve the airport services and facilities, Ip said, adding that Hong Kong will continue to expand its links by negotiating new air services agreement in addition to the 37 agreements Hong Kong has already signed.