Gladstone Ports Corporation started a weekly container service this year.
Gladstone Ports Corporation started a weekly container service this year.

Exports to Hong Kong halt as Aust moves on trade deal

AS AUSTRALIA moves to put the official stamp on a trade deal with Hong Kong, trade between the port region in southern China and Gladstone has ground to a halt this year.

No shipments have been made to Hong Kong from Gladstone Ports Corporation, Queensland's largest multi-commodity port, since June 2018 when 81,289 tonnes of coal was shipped.

The last shipment of LNG to Hong Kong was in the September quarter in 2017.

In the financial year to May nothing was shipped from Gladstone to Hong Kong, in comparison to the 2018 financial year when 226,135 tonnes of coal and LNG were shipped.

On March 26, Australia and Hong Kong signed the Australia-Hong Kong Free Trade Agreement which Prime Minister Scott Morrison touted would provide more opportunities for Australian investors, farmers and businesses.

The agreement is yet to be officially in place.

Gladstone is not alone in its reduction in exports to Hong Kong, with the country - whose name means 'fragrant harbour' - handling fewer shipments each year.

While Hong Kong's port dominated in the 1990s and early 2000s, in February it slipped out of the world's five busiest shipping container terminals for the first time.

Drewry Shipping Consultants senior analyst of ports and terminals Neil Davidson said Hong Kong was once the only effective port for serving southern China.

"Since (the early 2000s), mainland Chinese ports like Shenzhen and Guangzhou have seen huge expansion and investment in modern facilities, and have become much more effective competitors to Hong Kong," he said.

Mr Davidson said cost of living was another hindrance to Hong Kong ports, with labour and handling charges higher than mainland China's ports.

Hong Kong accounts for less than 3 per cent of China's gross domestic product, a fall from a peak of 27 per cent in 1993.

There are hopes a new alliance between terminal operators in Hong Kong will improve efficiency, but Mr Davidson said it remained to be seen how effective the group would be.

Mr Davidson said another significant challenge was the consolidation of ownership of ports and terminals in China.

"The plan to consolidate Guangzhou, Shenzhen, Zhuhai, Shantou and Zhanjiang, as well as river ports Foshan and Zhaoging will create a huge port entity which Hong Kong will have to compete with."

A Department of Foreign Affairs and Trade spokesperson said Queensland was traditionally a key supplier of minerals to Hong Kong, however supply and demand variances were expected.

Gladstone Ports Corporation would not comment on why exports to Hong Kong had reduced.

Australia has free trade agreements with seven of its top eight export markets for goods and services, covering close to 70 per cent of Australia's total trade.