The International Maritime Centre: from the Bay Area to Belt & Road Mr Benjamin Wong Head of Transport and Industrial

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1 The International Maritime Centre: from the Bay Area to Belt & Road Mr Benjamin Wong Head of Transport and Industrial Copyright Invest Hong Kong, HKSAR

2 The Belt and Road Europe Central Asia and West Asia The Mediterranean Africa Asia South Asia Hong Kong Access to half of the world s population within 5 Hours flying time Indian Ocean Greater Bay Area Southeast Asia

3 Greater Bay Area (GBA) Great Bay Area: 56,500 KM 2 1.Hong Kong 2.Macao 3.Guangzhou 4.Shenzhen 5.Zhuhai 6.Foshan 7.Zhongshan 8.Dongguan 9.Huizhou 10.Jiangmen 11.Zhaoqing Source: The State Council, The People s Republic of China, April 2017

4 Dynamic GBA The China government aims to develop a city cluster that could rival bay areas such as San Francisco and Tokyo The GBA, as a major passageway for air, land and sea transport linking countries along the Belt and Road, has comparative advantages in geographical location and logistics infrastructure GBA acts as a springboard to resource-rich countries such as Indonesia, Malaysia and Myanmar The Combined GDP of China s Bay Area reached US$1.36 trillion in 2016, with an estimated population of million. The 5th largest economy in Asia Source: SCMP June 2017 With 5% of China s population, it generates 12% of China s GDP Source: Colliers International (HK) Ltd Hong Kong International Financial Center and Professional Services Shenzhen Innovation and Technology Macau & Hengqin Leisure and Entertainment Hub Guangzhou Heavy Industry, Logistics and starting point of Silk Road

5 Substantial Winning Sectors: Transportation and Logistics The GBA is a cluster number of leading airports and ports in Pearl River Delta (PRD) region, with air and sea cargo throughput ranking top in the world. The GBA recorded more than 65.2 million TEUs of annual container throughput and handled 175 million passengers. 3 of the top 10 ports are located in the GBA, whereas 22 of the top 100 ports are in China Rank Top 3/10 Container Ports Port in the World Throughout ( 000 TEUs) 1 Shanghai 37,133 2 Singapore 30,904 3 Shenzhen 23,979 4 Ningbo - 21,561 Zhoushan 5 Hong Kong 19,813 6 Busan 19,455 7 Guangzhou 18,850 8 Qingdao 18,050 9 Dubai 14, Tianjin 14,519

6 Substantial Winning Sectors: Transportation and Logistics The GBA is covered by extensive network of railways and highways, it offers multimodal transport both internally and externally conducive to logistics development Source: SCMP June 2017 Two key railway lines: the Beijing-Guangzhou railway and the Beijing-Kowloon railway One of China s four biggest airports: the Baiyun Airport of Guangzhou is also situated at GBA Hong Kong Int l Airport is the busiest cargo airport in the world Oil and Gas Pipeline

7 Global Supply Chain and Logistics Centre in the Future Development of GBA Consistently increasing production cost in China drives enterprises to relocate and extend production lines to emerging countries such as Vietnam and Bangladesh The rising income level in emerging Asian countries has generated tremendous demand for imported consumer products China s share in global industrial products exports from 16.8% (2012) to 18.6% (2015) and semi-manufactures exports from 9.6 (2012) to 12% (2014), these reflect the increasingly close supply chain relationship between countries and China A supply chain linking China and major regions in S.E. China has gradually been become one of the world s three largest regional supply chains on a par with the Americas and Europe. Hong Kong acts as an international commercial & logistic centre, connecting China with other regions by providing one-stop supply chain service Source: HKTDC, July 2017

8 Hong Kong: A Key Link for the Belt & Road What Can We Offer? Quality & efficient financing platform High Standard of corporate governance Abundant talent pool Ability to manage and operate mature projects Diversified investors including banks, private equities and etc World's largest offshore Renminbi business hub Largest pool of RMB deposits: RMB595.1bn Largest Dim Sum Bond market outstanding RMB256.8bn Daily RMB clearing and settlement turnover: RMB 871.5bn Asia Infrastructure Investment Bank (AIIB) Approval of Hong Kong's membership highlights what we can offer - project loans, bond issuance, treasury management, private equity investments and many others. Infrastructure Financing Facilitation Office (IFFO) The IFFO now boasts 77 members - ranging from multilateral financial agencies, development banks, private and public sector investors, to insurance companies and professional service firms - all keen to ride the wave of Belt and Road opportunities.

9 Investment Project in B&R Piraeus Port (Greece) China Cosco Shipping Group (CCS) acquired stake control in the Piraeus Port Authority, taking over the port's management and operations Piraeus recorded the 2 nd highest increase in TEU movements of all European ports between 2007 to 2016, reaching up to 167.7% in the period of 2016 The port recorded an 11.7% increase in TEU handled in 2016 compared to 2015's 3.289m TEU. Volumes in 2016 made Piraeus the 8th largest container port in Europe, indicating the huge potential business development of the Greek Port With the Belt and Road initiative, the company has an aggressive plan to turn Piraeus into the biggest transport centre in the Mediterranean, with the largest container port in Europe and the world's main cruise departure hub Source: Seatrade maritime news; porteconomics.com

10 What s Next? Like other bay areas, all share a common feature that their entire area is made up of a number of clusters with strong interaction with one another. Enterprises in the clusters develop on a mutually beneficial basis while sharing competitive advantages of the cluster. We wish to create an ecosystem of such cluster environment to capitalize commercial projects and long term investments Past experience has shown that not only first-tier cities like Hong Kong, Guangzhou and Shenzhen wish to become regional or international financial, trade and shipping centres capable of attracting the presence of international corporations and business activities, even second and third tier cities also hope to join the fray and develop high value-added industries Collaborations for all stakeholders, including governments, investors, service providers are the key to success Hong Kong can enhance its functions in financing, international operation and risk management by strengthen co-operation of GBA enterprises, driving industries in the Greater Bay Area to undergo transformation and upgrading, and give full play to the core values of its role as a super connector in the building of the Belt and Road

11 GET IN TOUCH Benjamin Wong Head, Transport and Industrial Tel: (852) /F, Fairmont House, 8 Cotton Tree Drive, Central, Hong Kong Melvin Lee Head, Investment Promotion Tel: (65) melvin_lee@hketosin.gov.hk 9 Temasek Boulevard, #34-01 Suntec Tower Two, Singapore