The port of Hong Kong

Port of Hong Kong

The Port of Hong Kong, located by the South China Sea, is a deepwater seaport dominated by trade in containerised manufactured products, and to a lesser extent raw materials and passengers. A key factor in the economic development of Hong Kong, the natural shelter and deep waters of Victoria...

 is a deep water port located in southern China

Northern and southern China

Northern China and southern China are two approximate regions within China. The exact boundary between these two regions has never been precisely defined...

. It is one of the hub ports serving the South-East and East Asia

East Asia

East Asia or Eastern Asia is a subregion of Asia that can be defined in either geographical or cultural terms...

 region, and is a gateway to mainland China

Mainland China

Mainland China, the Chinese mainland or simply the mainland, is a geopolitical term that refers to the area under the jurisdiction of the People's Republic of China . According to the Taipei-based Mainland Affairs Council, the term excludes the PRC Special Administrative Regions of Hong Kong and...

. The city of Hong Kong

Hong Kong

Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

 began as a colony of the United Kingdom

United Kingdom

The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

. It was a free port

Free port

A free port or free zone , sometimes also called a bonded area is a port, port area or other area with relaxed jurisdiction with respect to the country of location...

, and became an international trade

International trade

International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product...

 center connecting land and sea transport between China and other countries. The port has mature infrastructure and well-developed air-sea-land transport. It helps Hong Kong maintain its position on international trade centre and transshipment hub.

As part of the 1997 transfer of sovereignty

Sovereignty

Sovereignty is the quality of having supreme, independent authority over a geographic area, such as a territory. It can be found in a power to rule and make law that rests on a political fact for which no purely legal explanation can be provided...

 of Hong Kong from Britain to China, the ship registration system has made some adjustments. In 1990, the Marine Department set up a separate system for the Hong Kong Shipping Register. The ordinance of Hong Kong Ship Registration was amended accordingly.

Adjustments

1 Name of Shipping Registry

By authorization of the Government of the People’s Republic of China, the Hong Kong Shipping Register should follow the Basic Law

Hong Kong Basic Law

The Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, or simply Hong Kong Basic Law, serves as the constitutional document of the Hong Kong Special Administrative Region of the People's Republic of China...

 by using the name ‘Hong Kong, China” to maintain a separate ship registration system.

2 Ownership of Ship

For ship preparing to register in Hong Kong, the shipowner should authorize a local agent, who roles as the representative connected with Marine Department, so as to better manage fleet of ships directly.

3 Employment of Ship Crews

Under the new ship registration system, there are no nationality requirements for officers and crew who serve on Hong Kong registered ships. Crew size depends on the ship's size and nature. Ship officers must have respective certificates of competency issued by Hong Kong Marine Department in compliance with the STCW

STCW

The International Convention on Standards of Training, Certification and Watchkeeping for Seafarers , 1978 sets qualification standards for masters, officers and watch personnel on seagoing merchant ships. STCW was adopted in 1978 by conference at the International Maritime Organization in...

95 Convention.

4 Equipment of Registered Ships

Equipment should fulfill the requirements on safety and protection of marine environment ratified by International Maritime Organization

International Maritime Organization

The International Maritime Organization , formerly known as the Inter-Governmental Maritime Consultative Organization , was established in Geneva in 1948, and came into force ten years later, meeting for the first time in 1959...

 (IMO). In addition, Shipowners should authorize classification societies to carry out statutory surveys and issue relevant certificates.

5 Preferential Charges

There are 3 types of charges: First Registration Fee, Annual Tonnage Charges (ATC) and Classification Society

Classification society

A classification society is a non-governmental organization that establishes and maintains technical standards for the construction and operation of ships and offshore structures...

 Charge. To encourage long term and stable registration, a First Registration Fee reduction scheme was put in place in April 1999. For ships not exceeding 500 Gross Tons

Tonnage

Tonnage is a measure of the size or cargo carrying capacity of a ship. The term derives from the taxation paid on tuns or casks of wine, and was later used in reference to the weight of a ship's cargo; however, in modern maritime usage, "tonnage" specifically refers to a calculation of the volume...

 (GT), the first registration fee is HK$3,500; ships exceeding 500GT, the fee is HK$15,000, much lower than the original charges of HK$100,000.

If a ship has no detention record under Port State Control

Port State Control

Port State Control is the inspection of foreign ships in other national ports by PSC officers for the purpose of verifying that the competency of the master and officers on board, the condition of a ship and its equipment comply with the requirements of international conventions Port State...

 (PSC) regime within 2 years, the registered ship receives a 6 month ATC reduction for the next year.

Hong Kong registered ships receive around 30% reduction in port dues in China ports since January 2000.

6 Taxation

Revenue generated from international trade including postage, passenger carriage and charter of ships can be exempted from the profits tax. Hong Kong participates in the Taxation Relief Agreement with 12 partner countries including the United States, China, United Kingdom, Germany, South Korea, Singapore, New Zealand, Netherland, Norway, Belgium, Denmark and Sri Lanka.

7 Quality Control

Quality control

Quality control, or QC for short, is a process by which entities review the quality of all factors involved in production. This approach places an emphasis on three aspects:...

 System

Hong Kong Shipping Register introduced a quality control system in 1999. The system ensures that ship management companies perform inspection and survey on their ships. Since the Tokyo Memorandum of Understanding

Memorandum of understanding

A memorandum of understanding is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in...

 (MOU) in April 1994, Hong Kong has been on the Committee of Port State Control system

Control system

A control system is a device, or set of devices to manage, command, direct or regulate the behavior of other devices or system.There are two common classes of control systems, with many variations and combinations: logic or sequential controls, and feedback or linear controls...

. The detention rate of Hong Kong registered ships is lower than other Flag State

Flag State

The flag state of a commercial vessel is the state under whose laws the vessel is registered or licensed.The flag state has the authority and responsibility to enforce regulations over vessels registered under its flag, including those relating to inspection, certification, and issuance of safety...

 countries.

Summary

The new measures not only reduce the operation cost of ship management, but also improve service quality. The new system increased Hong Kong's competitive advantage

Sustainable competitive advantage

Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry. Achieving competitive advantage strengthens and positions a business better within the business environment....

for attracting more ships port. As of January 2009, Hong Kong registered ships have reached 40.56 million tons and over 1,380 vessels.