¡¡¡¡In the recently announced Hong Kong SAR Government 2008-2009 Budget, a proposal has been recalled to study the site of the No. 10 container terminal. Professionals' views vary greatly on this long-discussed issue. I would against building such a new terminal.
¡¡¡¡From the macro perspective, if we compare the total handling capacity of all planned container terminals within the Pearl River Delta by 2010 to the newly-added demand from the accessible hinterland, then we will get a conclusion proving oversupply. Then at the micro-level, three terminals including Yantian, Dachan Bay and Nansha will definitely exceed Terminal 10 in the cost of capital efficiency and business cost-effectiveness. In other words, even if the new terminal were completed, it might also be trapped in a deadlock of being short of routes as well as cargo supply, which is the last thing terminal operators would like to see.
¡¡¡¡In addition, we assume there are more reasons by which we will reject building Terminal No. 10.

¡¡¡¡Firstly, it is an inevitable choice for Hong Kong gradually to reduce its expansion of container handling business. For this "international shipping centre", what applies the most should be to convert from a "hinterland-based" role to the "re-export" one. During this, the radiation effect by an international shipping centre, as well as functions of an international finance and trade centre to provide export services for manufacturing industries shifted to the surrounding areas, will consequently be strengthened. Meanwhile, container volume directly handled in the port will gradually decline.

¡¡¡¡Secondly, simply improving the efficiency of existing terminals will adequately meet future demand. In recent years, throughput growth rate of Hong Kong Port has declined each year, with just a 1.5% increase in 2007. And the gap between Hong Kong and Shenzhen Port has been substantially narrowed from 100 vs. 453 in 2000 to 100 vs. 113 in 2007. In this declining trend, there is expected to be negative growth in Hong Kong's container port business. As a result, to improve the efficiency of existing terminals, without building new ones, would be sufficient to meet future demand.

¡¡¡¡Thirdly, it seems a better idea to build up a Hong Kong-Shenzhen combined international shipping centre within the same surroundings, compared with raising a new terminal in Hong Kong. Hong Kong and Shenzhen are supposed to give full play of their respect advantages and avoid their separate flaws, while re-positioning their labour divisions. Provided both keep operating on their own, or even compete for the same resources, then they are bound to conflict with each other and suffer from negative price competition, or even failure. We would like to suggest, based on the combined international shipping centre, while Hong Kong focusses on the re-export business, Shenzhen Port may mainly deal with exported containers. At the same time, Shenzhen Port needs to implement a bonded port management system and model so that it transition towards Hong Kong's operation mode as a free trade zone and free port. Eventually, Shenzhen Port will match the latter, becoming an important component of Hong Kong's free port system. Compared with squandering investment on a new terminal, extending the innovation in a free trade port system to Shenzhen from Hong Kong would assure more social and economic profits.