ENVIRONMENT
7. Conclusions and Future Work
shift their operations to provinces which are far away from Hong Kong, including west part of Pan-PRD and other inland provinces. If PTEs move to lower cost countries in Asia, HKP will lose geographical proximity to cargo source. At most, it will intercept some transshipment cargo from nearby lower cost countries in Asia. Relocation to near major markets would happen when oil price stays at very high levels, which will greatly discourage global trade. HKP development, along with other ports in Asia, would become very pessimistic in this scenario.
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$37.5 per barrel or below, Inland of China may become most cost effective.
If oil price persists at very high level of $300 or above, locations near major markets will become most preferred. Last, implications of potential relocation trends on HKP development are discussed. Relocation of PTEs to western Guangdong will be slightly favorable. Relocation to northern and eastern Guangdong will be slightly unfavorable. Relocation to Pan-PRD will be modestly unfavorable. Most unfavorable trends are the relocations of PTEs to other inland provinces of China, lower cost countries in Asia and near major markets.
The research is limited in several areas. First, the modeling work uses a footwear PTE for case study. Modeling results are expected to be valid in general as footwear is a typical labor-intensive processing trade product in the PRD region. However, due to differences on cost structures and freight- intensiveness, other products may have different critical levels in factors to trigger various relocation trends. Second, the MIP model focuses on the effect of four key factors. A real life manufacturing relocation decision usually involves more factors. Third, potential relocation trends are subject to uncertainties. It is not impossible that unexpected factors would alter the potential relocation trends. Last, implications on the HKP development are based on the current situation of the port and neighboring mainland ports. The changing port competition dynamics in the region may lead to different prospects.
Future work on the subject is to derive policy responses for the HKP development. This will be of practical benefits to the port and the economy of Hong Kong. As the logistics industry of Hong Kong is twinned together with the trading industry, further study on trading industry of Hong Kong will be required. Port competition from mainland ports has diverted a large portion of cargo from the HKP. Future work will include a detailed comparative study on the advantages and disadvantages of ports in the territory.
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