New Zealand Exports Via Hong Kong and Shenzhen Port Terminals: Study of Oversea Transportation

Abstract:

Purpose: The paper is aimed to provide an overview of New Zealand companies in accessing overseas market through Hong Kong and ShenZhen port terminals, regarding to the supply chain strategic approaches, logistic management, costs and regulation issues. Due to economic globalisation, transporting products overseas to distribute in a foreign market is a common phenomenon. Often products that were exported into a different country will serve an unique national competitive advantage, that do not existed when selling in domestic markets. This becomes an attractive opportunity for businesses to further markup their products’ price and gain a higher revenue in return. Transportation plays an important role in supply chain strategy. Thus, transporting to oversea is more complex than deliver domestically as there are a lot more risks involved, such as cost, security and maintaining quality. Therefore, deciding an appropriate supply chain strategy and choosing overseas port terminals will be necessary for transporting oversea, because there will be an extensive of implication and constraints regarding to the regulation and exchange rate. In this paper, we will look at specifically on port terminals located in Hong Kong and ShenZhen. Hong Kong and ShenZhen belongs to the South-China district, with the rapidly growing demand and population of 200 million, it becomes a huge market opportunities for businesses worldwide. As New Zealand located remotely in the south hemisphere, New Zealand companies' usually rely on South-China ports as either a destination or an intermediate re-exporting centre (Chung , 2003). Hong Kong and ShenZhen are the major port terminals in receiving New Zealand exports. Therefore, the logistic flow, costs, and political issues regarding to transportation will be discussed and accessed in this paper. Which for the findings, I am aiming to provide a updated comprehensive overview of how New Zealand exports are utilising ports located in Hong Kong and ShenZhen and the underlying reasons of doing so.

Motivation: According to my research on the political background from (Yang , 2005), ShenZhen and Hong Kong are neighbouring cities and close in geographic distance, however, their trading terms and regulations on New Zealand exports are completely different. New Zealand and Hong Kong trades were bounded by ‘ New Zealand - Hong Kong, China Closer Economic Partnership’ (CEP agreement) signed in 2011. Conversely, ‘NZ-China Free trade agreement (FTA)’ signed in 2008 will be employed if New Zealand exports decided to ship to ShenZhen. Moreover, Hong Kong and Shenzhen have a different currency, which are Hong Kong Dollars(HKD) and RMB respectively. Due to the diverse nature of these two regions, I believe there will be interesting findings derived from studying the benefit and implication for New Zealand exports to enter either these regions, and how supply chain strategies may adjust to coordinate with the trading terms of each region to maximise the competitive advantage.

Importance - Academic Perspective There are many existing scholar articles and researches were dedicated to Hong Kong and ShenZhen logistic status, they are mostly exploratory on describing the existing phenomenons in domestic perceptive. I would like to use an alternative approach on viewing these port terminals with an outside exporter’s perspective, that to oversee the underlying reasons of why foreigners chose to enter South-China market via Hong Kong or Shenzhen. Which this is not widely studied.

Secondly, there are new interest to be found. Hong Kong is a globally recognised top leading freight transport and knowledge-based supply chain management centre in East Asia (Wang & Cheng , 2010). However, Hong Kong port terminals’ traffic flow were slowly declining in recent years because of the competition with ShenZhen (Song , 2002). I would also like to explore the underlying reasons of why ShenZhen is attracting foreign exports comparing to Hong Kong. Since the latest article on ‘Google Scholar’ about this research topic was conducted in 2002, I would like to update the current status of these

top 2 ports that receive the most foreign goods inflow in South-China district and fill in the knowledge gap.

Benefits - Practice Perspective The goal of this article