Advertisement
Cosco Shipping
BusinessCompanies

Hong Kong says shipping to prosper even as US bilateral tax suspension triggers new challenges to port

  • Hong Kong’s efforts will support sustainable development of the maritime industry, government says in email response
  • Bilateral tax deal will have limited impact on shipping companies if ended, while US-China trade tensions remain overriding concerns: analysts

Reading Time:2 minutes
Why you can trust SCMP
A container ship approaches the Kwai Tsing Container Terminals in Kwai Chung. Photo: Winson Wong
Iris Ouyang
Hong Kong remains an attractive place for the shipping industry to prosper even as the US suspension of a 1989 bilateral shipping tax agreement triggered another challenge to the port’s weakening role in the region.
Advertisement
The city will be able to support the sustainable development of the maritime industry, the Transport and Housing Bureau said in an email reply to the Post. The government has criticised the US unilateral move earlier this month as a lose-lose proposition for both parties.

“With the strong institutional advantages of a competitive tax system that is simple with low tax rates, a business-friendly environment, a level-playing field, and a host of high-quality maritime services on offer, Hong Kong will remain an attractive place to do business,” the bureau said.

While officials and analysts have downplayed the issue as a “limited impact” event, the city can do without the irritant. Hong Kong has slipped down the pecking order among the world’s busiest ports over the years, losing two notches in 2019 to eighth, according to industry data.

02:20

Hong Kong container trucker living with impact of US-China trade war

Hong Kong container trucker living with impact of US-China trade war

The US suspended the reciprocal tax exemption agreement with Hong Kong on shipping last week, which allows companies to avoid double taxation on shipping income.

Advertisement

The move formed part of the US decision last month to end the city’s trade privileges under the Hong Kong Policy Act of 1992, after Beijing imposed the controversial national security law on Hong Kong on June 30. The US also sanctioned several top city and mainland officials, including Chief Executive Carrie Lam Cheng Yuet-ngor for allegedly suppressing Hong Kong freedoms.

Advertisement