Hong Kong. Photo: iStock

As the Sino-US trade war spreads to the industrial sector, many are wondering if the division of labor in the industry chain may have an impact on Hong Kong and its three points of focus.

In terms of trade, Hong Kong is primarily a port for re-exportation that relies on strong maritime, aviation and logistics capabilities. The city is well experienced in international trade and financial services.

The Entrepot status of Hong Kong cannot be replicated easily in neighboring economies. Hong Kong’s status as an international trade center has gone through many changes in terms of the international division of labor and has remained relatively stable.

Even if there is a change in the division of labor in the mainland, the international trade in surrounding economies still largely depend on Hong Kong, which will not change the trade flow in the foreseeable future.

As an international finance hub, Hong Kong has unique advantages, including developed financial markets, European-American legal systems and lenient capital project management.

While cities in the mainland have been actively trying to replicate Hong Kong’s stature, the edge still belongs to Hong Kong as its status is further consolidated. Hong Kong is also fully capable of occupying market share in increments as other Asian cities raise their economic statuses.

As for international shipping, Hong Kong is no longer needed as an entry point for mainland cities. Hong Kong now mainly serves as an international transit point.

The flexibility of the Hong Kong Customs’ supervision is different from various free trade zones in other ports. Hong Kong’s institutional advantages in terms of supervision will still be there in the long run. Other emerging ports have a bit of catching up to do.

This article was first published on ATimesCN.com and translated by Kamaran Malik.

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