Some shipping companies are reportedly shifting operations out of Hong Kong and even removing their vessels from its flag registry, citing fears that the famous port could get caught in the crossfire over between Washington and Beijing.
Six shipping executives told Reuters they were concerned that their ships could be commandeered by Chinese authorities or impacted by US sanctions, if the trade war being waged by Washington on Beijing continued to escalate. Fears of possible military clashes between the two countries were also raised.
The US has already proposed charging non-Chinese maritime transport operators operating Chinese-built ships up to US$1.5 million to enter its ports, in a bid to constrict China’s growing dominance in the global shipbuilding, maritime and logistics sectors. The impact would be incredibly widely felt, given China builds more than half of the world’s ships.
Hong Kong’s flag is the eighth most common on ships worldwide, and its harbour has been a hub for the global shipping industry since the establishment of its port in the mid-19th century.
[See more: Hefty US port fees on Chinese vessels would impact ‘all shipping firms’]
In the two decades following Hong Kong’s 1997 retrocession to China, Hong Kong’s ship registry grew by about 400 percent. Over the past four years, however, the number of oceangoing vessels flagged in the city fell by more than 8 percent to 2,366 ships.
Those interviewed by Reuters pointed to China’s intensified focus on national security and trade frictions as reasons for withdrawing from the SAR. “We don’t want to be in a position where China comes knocking, wanting our ships, and the US is targeting us on the other side,” said one executive, who was granted anonymity.
A spokesperson for Hong Kong’s government told Reuters that it was natural for shipping companies to review operations given changing geopolitical and trade circumstances, and normal for the number of ships on registries to fluctuate in the short term.
They denied Hong Kong’s government could commandeer ships to serve in a Chinese merchant fleet, and cited a range of incentives that should see its harbour “continue to excel as a prominent international shipping centre.”
