Hong Kong is a major international and regional aviation and maritime hub in Asia. In 2000, the airport handled 2.24 million tonnes of international air cargo and the container port sector handled 18.1 million TEUs. That this can be achieved is largely due to the people who run the services and facilities — the investors as well as the efficient workforce. It is also the result of a productive blend of private and public sector co-operation.

The Government is committed to providing a conducive environment and the necessary infrastructure to facilitate the development of the logistics business. The opening up of services auxiliary to distribution as a result of the Mainland's accession to the World Trade Organisation will provide new opportunities for Hong Kong logistics services providers (LSP). As Hong Kong LSP have a strong client base in the Mainland, the expected growth in trade volume and the liberalisation of this sector will enable them to provide even better supply-chain management services to their clients.

Hong Kong has an efficient, reliable and well-connected port and airport to facilitate the future development of the logistics sector. In the case of air cargo, the airport has ranked No. 1 world-wide in terms of international cargo throughput for four consecutive years since 1996. Each week there are about 3 600 scheduled passenger and all-cargo flights to some 130 destinations. With its dual runways, the airport has the capacity to accept the expected future increases in demands comfortably.

Hong Kong is the world's busiest container port. The HKSAR also has the most productive container terminal in the world, handling double the industry standard, and the biggest private terminal operator in the world. A new Container Terminal 9, with four deep sea berths and two feeder berths, is being constructed on Tsing Yi Island opposite the eight existing terminals at Kwai Chung. When fully developed, the terminal will provide an additional capacity of at least 2.6 million TEUs. Similarly, the river trade and air freight terminals are the largest of their kind in the world.

The Government and the Port and Maritime Board (PMB) regularly carry out cargo forecast updates and review the progress of port development to ensure that the right facilities can come on-line when needed. A Committee on Logistics Service Development has been set up under the PMB to consider measures to develop and to promote the competitiveness of Hong Kong as a logistics centre.

Hong Kong has also set up industrial estates that provide low density land at development cost for industries that meet the prescribed criteria. To strengthen the HKSAR's position as an international air cargo hub, the AA invited investors to develop a logistics centre at the airport and has awarded a licence for the operation of a marine cargo transfer centre in the airport zone. The Government has taken a proactive approach in putting in place measures to facilitate the movement of goods. The Air Cargo Transhipment (Facilitation) Ordinance, which came into effect in May, removes licensing requirements for transhipment of air cargo in Chek Lap Kok except for very sensitive products. In addition, the Customs and Excise Department has completed a consultancy study to explore ways of simplifying and streamlining customs clearance procedures for goods.

Construction of the River Trade Terminal in Tuen Mun has been completed. The River Trade Terminal Co Ltd is making plans to strengthen its cargo consolidation capabilities to enable the terminal to function as a logistical base to support the river trade and other activities of the port. This will strengthen the current logistics and warehousing activities being carried out at the Asia Terminals Ltd and Hong Kong International Distribution Centre buildings, both of which are among the largest on-dock industrial warehouse buildings in the world.

The PMB has been examining how cargo sources can be reinforced through better feeder connections to the port through road transport, water links and freight rail. The port and airport are well served by an extensive road network. The Duplicate Tsing Yi South Bridge will meet port traffic needs arising from operations at Container Terminal 9 in Tsing Yi. An additional expressway and more local roads are being planned to connect the port to the Mainland boundary and other parts of Hong Kong.

Hong Kong has excellent telecommunications and information technology (IT) infrastructure to support the development of e-commerce and supply-chain logistics. The telecommunications market is being progressively liberalised to ensure the economy continues to be supported by world-class telecommunications services at reasonable prices. The domestic network is already fully digitalised, and the local broadband infrastructure is developing rapidly to meet growing traffic demands, making Hong Kong's external connectivity among the best in the region, and PNET (public non-exclusive telecommunications) charges for Internet access the lowest in the world.

To create a favourable environment for e-commerce, the Government has established a clear legal framework for the conduct of electronic transactions through the enactment of the Electronic Transactions Ordinance in January. A local public key infrastructure supported by certification authorities to provide a safe and secure environment for the development of e-commerce has been established. The Hongkong Post has been providing a public certification service since January.

To further promote the development of e-commerce, the Government has launched (in October) the Electronic Service Delivery Scheme to provide services to the public through the Internet and other electronic means in a seamless manner. The Customs and Excise Department is developing an electronic EDI-Manifest System for carriers to submit manifest data through electronic data interchange. The system will enhance efficiency and reduce paper work. It also promotes the wider use of EDI in the trading community.

Moreover, the Tradelink, as the exclusive provider of a range of government trade-related transaction services through electronic data interchange, has formed a Pan-Asian E-Commerce Alliance with Trade-Van of Taiwan, SNS of Singapore, KTNET of Korea and Infoshare ITD Co Ltd of China. The Memorandum of Understanding signed by the parties establishes mutual recognition and cross-certification of digital certificates for use in electronic document exchange, which will further facilitate the development of e-commerce.