Talk of fierce competition between the container terminals of Hong Kong and those across the river in Shenzhen ignores one minor point – there is no competition between the container terminals of Hong Kong and those across the river in Shenzhen.
Not in any business sense, anyway. Maybe inter-departmental competition, like the accounts department versus the operations division on the annual company sports day.
Because the same companies basically own the terminals on both sides of the fence. Take a look at the shareholding structure of Hong Kong and Shenzhen terminals and you find many of the same names.
In Hong Kong there are nine container terminals with 24 berths. All terminals are financed, built, owned and operated by private operators.
Hongkong International Terminals (HIT): Shareholders Hutchison Port Holdings, PSA International.
Modern Terminals: Shareholders Wharf (Holdings) and China Merchants Holdings (International).
Cosco-HIT: Shareholders HIT and Cosco Pacific.
DP World: Shareholder DP World.
Asia Container Terminals: Shareholders DP World, PSA International.
In Shenzhen, there are four main ports that have most of the Hong Kong operators in joint ventures with mainland state-owned entities.
Yantian International Container Terminals: Shareholders Hutchison Port Holdings, Shenzhen Yantian Port Group.
Shekou Container Terminals: Shareholder China Merchants Holdings (International), Modern Terminals.
Chiwan Container Terminals: Shareholders Chiwan Wharf Holdings, Kerry Holdings, Hidoney Development (held by China Merchants Holdings (International) and Modern Terminals.
Dachan Bay: Shareholders Modern Terminals, Shenzhen Municipality.
Is it a good thing to have such a common shareholding structure? Who knows. But it is a cosy little club, that's for sure.
Shenzhen is reporting strong monthly throughput this year and will almost certainly overtake Hong Kong and move into third place on the world’s busiest port list. The mainland port is steadily increasing its market share of South China export containers because it simply makes sense for shippers in the Pearl River Delta to send their boxes out via Shenzhen rather than go through more expensive and further away Hong Kong.
But with the same port operators running the show on both sides, Hong Kong’s loss is Shenzhen’s gain. And vice versa, in the unlikely event Hong Kong ever manages to win back market share.