There are multiple reasons for the decline in Hong Kong's entrepot trade. Firstly, the adjustment of the global trade pattern is a key factor. In recent years, many countries have been building trade hubs around themselves to reduce their dependence on a single trade transit point, which has led to the diversion of Hong Kong's entrepot trade share. Secondly, with the upgrading of the mainland's trade structure, in the past, many mainland enterprises used Hong Kong for entrepot trade. Now, with the improvement of port facilities and customs clearance facilitation in the mainland, enterprises are more inclined to engage in direct import and export. Thirdly, the rise of trade protectionism, with some countries imposing additional tariffs and other measures, has affected the circulation of goods and suppressed the demand for entrepot trade. In addition, the increase in logistics costs, along with the relatively high land and labor costs in Hong Kong, has increased the cost of entrepot trade and reduced its competitiveness. Finally, the emergence of new trade models, such as the increase in direct transactions through e-commerce, has also reduced the dependence on traditional entrepot trade.
Professional consultant answers
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
There are multiple reasons for the decline in Hong Kong's entrepot trade. Firstly, the adjustment of the global trade pattern is a key factor. In recent years, many countries have been building trade hubs around themselves to reduce their dependence on a single trade transit point, which has led to the diversion of Hong Kong's entrepot trade share. Secondly, with the upgrading of the mainland's trade structure, in the past, many mainland enterprises used Hong Kong for entrepot trade. Now, with the improvement of port facilities and customs clearance facilitation in the mainland, enterprises are more inclined to engage in direct import and export. Thirdly, the rise of trade protectionism, with some countries imposing additional tariffs and other measures, has affected the circulation of goods and suppressed the demand for entrepot trade. In addition, the increase in logistics costs, along with the relatively high land and labor costs in Hong Kong, has increased the cost of entrepot trade and reduced its competitiveness. Finally, the emergence of new trade models, such as the increase in direct transactions through e-commerce, has also reduced the dependence on traditional entrepot trade.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
The change in Hong Kong's local industrial structure is also one of the reasons. The service industry in Hong Kong has developed rapidly, while the proportion of the manufacturing industry has declined, which has had a significant impact on the related supporting industries of entrepot trade, reducing the sources and demands of goods for entrepot trade.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
The digital transformation of the supply chain brought about by technological development has increased the transparency of the trade chain and made information more symmetrical. Enterprises can directly connect with upstream and downstream, reducing their dependence on entrepot trade, which has also affected Hong Kong's entrepot trade.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Continuous trade frictions among regions have increased the uncertainty of trade. Some enterprises, in order to avoid risks, have changed their trade routes and models and no longer use Hong Kong for entrepot trade, thereby leading to a decline in Hong Kong's entrepot trade volume.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
The impact of the pandemic on the global economy and trade has led to blocked logistics and a decline in demand. As an important trade node, Hong Kong's entrepot trade has been affected by poor logistics and a reduction in orders, resulting in a decline in business volume.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
The rise of emerging economies in Southeast Asia and other places,，。(The rise of emerging economies in Southeast Asia and other places, attracting some of the trade that originally passed through Hong Kong for entrepot trade with the advantage of lower costs, has diverted Hong Kong's entrepot trade business.)
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
Hong Kong's own infrastructure is aging. Compared with emerging trade hubs, its advantages in terms of goods handling efficiency and other aspects are no longer prominent, which has affected the competitiveness of entrepot trade.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
The change in the financial environment also has an impact. Fluctuations in exchange rates, changes in financing costs, etc., have made enterprises face more financial risks and costs when conducting entrepot trade in Hong Kong, prompting enterprises to change their trade strategies.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
The loss of talents related to Hong Kong's entrepot trade and the insufficient cultivation of new talents have led to the impact on business operations and, to a certain extent, reduced the scale of entrepot trade.