Hong Kong is now, without doubt, one of the best examples of prosperity, wealth and abundance in Asia. The city used to be a group of fishing villages before the British occupation. In 1842, after the British won the Opium War, Hong Kong was transferred to Britain as its colony and soon became a famous port.
Hong Kong’s first boat club is believed to have been launched by a group of rowers in 1849 and was named a boat club in Hong Kong. In 1894, the Royal Hong Kong Yacht Club began. The yacht club was built primarily for officers of the British Army and expatriates who recognized that they were swimming as leisure activities.
The first typhoon shelter in HK was built in 1883 after a typhoon in 1874, devastating HK and Macao, killing 2,000 people and 5,000 deaths. Ships and fishing vessels moored in the waters were completely destroyed by this typhoon, as a result of which the government built these shelters to protect all ships and preserve the city’s reputation as a safe port of delivery. In subsequent years, more shelters were built around the city, creating space for a berth of commercial and private ships.
During World War II, Hong Kong was captured by the Japanese in 1941, when they bombed key sites around the city and defeated the British army. The Japanese surrendered and left in 1945, giving them to the British.
In the 1950s and 1960s, many people from China went to HC with their money to avoid civil unrest in China. They created factories and businesses that turned the city into a manufacturing center for products such as textiles, plastic products and electronics.
The Hong Kong boat industry has also grown. In 1967, another boat club was founded in the area called Aberdeen, which is located in the southern part of the city.
Since an independent anti-corruption agency was created to get the country back on track. Thanks to its impressive system of justice, low taxes and effective government, HK have contracts with foreign investors, traders and talented professionals. Soon the city became a financial center. Today, its stock market is the second largest in Asia and ranks 6th in the world. HK is currently known as the freest economy in the world with a developed infrastructure. Many developers in other Asian countries are looking at HK and trying to copy their beautiful sky scrapers.
Hong Kong is also a key city for boating in Asia. This is not the largest boat market in Asia, like Japan, but there are about 12,000 leisure boats in its own waters. Hong Kong is a small city with a total area of 1104 square kilometers and a population of 7.2 million people. The reason why Hong Kong is referred to as boat capital in Asia is because the city is very globalized and compact, in the sense that the services and experience associated with the boat are easily accessible. Most people in Hong Kong speak English. In Hong Kong, repair yards and professional jobs such as crew, captains, surveyors, mechanics and consultants are easily accessible.
A large number of rich people live in Hong Kong. As a result, there are also many high-quality, expensive yachts on the water. In Hong Kong, everything is very well organized, and it can be done incredibly quickly, even when government departments are involved. In Hong Kong, there is no tolerance for corruption. This is one of the safest places for boats in the world, and people adhere to the rule of law. In the waters surrounding Hong Kong, there are about 250 islands, which makes it an exciting place for boating. But one of the main reasons for the success of Hong Kong’s Hong Kong industry is the fact that it is a tax that does not impose a tax on pleasure boats.
Thousands of full-fledged crews and boat captains work in Hong Kong’s Hong Kong industry. The annual salons of the ship’s crew are about 200 million US dollars. In addition, water sports enterprises also provide employment, such as shipyards, yacht distributors, cars and electronics, charters, brokers, handymen, etc. This makes it a huge industry that creates significant employment.
During the Asian financial crisis in 1997, the Hong Kong submarine industry experienced an unusual boom. Before the crisis, the industry was already coping well with financial markets. There was a lot of abundance and attitude that the market has reached a new level. The general consensus was that the industry would be unsinkable. Investments in almost all sectors were possible on borrowed money, people made quick money and considered themselves invincible. Some of them were self-proclaimed kings and princes in the stock market, living in complete luxury, and many ordinary people with well-paid jobs saw wealth and were forced to take unnecessary risks. As a result, a large number of people invested borrowed money.
Sometimes the unthinkable happened. In 1997, the Asian market fell. Many who have been greedy will now need more than a decade to get out of debt. Bankruptcy, heavy job losses and, most importantly, suicides have become commonplace. Some even took the lives of their families with theirs.
In these difficult times, the market for used boats was unexpected for those who understood this opportunity. In the superstitious Asian culture, boats left by people who committed suicide were considered unhappy and sold cheaply just to get rid of them. Then these boats were bought by those who understood this opportunity with little or no cost. Many boats were now owned by banks and financial firms. Some who understand the value of boats collect money, but they can buy these problem assets.
The Internet, which was fairly new during 1997, allowed boat sellers to stand out in the global market. In subsequent years, there was a huge export of used boats to strong countries such as the markets of Australia, USA and Europe. All that a local agent needs is simple know-how for purchasing boats. It was a simple buying and selling.
This practice continued until 2001, when the attacks of September 11 in the United States slowed down the use of boat exports from Hong Kong.
Hong Kong had to face another blow to its economy with an outbreak of the flu virus, known as the SARS virus. The first case was registered in March 2003, when a businessman traveling to Hong Kong was infected with a deadly virus. The infection quickly spread to hospital workers and people in the hotel where he lived. The Hong Kong health authority quickly took measures to contain the virus, but panic spread throughout the city. The whole city slowed down, as people were less inclined to go out and use public transport. There were also cases of placement of residential buildings under quarantine. During this time, the real estate market has also been reached almost all the time. In these difficult conditions, the boat market continued to remain lethargic, although several new markets appeared for the export of used boats, such as Russia, Korea and the Philippines.
After 2004 and 2005, the economy began to recover worldwide. Hong Kong quickly experienced a hike in stock markets and real estate prices. In difficult times, the boat market has changed a bit. The export of used boats was still a small market, but by that time a new motor yacht market had begun. Locals bought new European yachts, and Hong Kong’s Hong Kong industry was once again returning. This time many more brands appeared on the market, and many more boat dealers appeared in the game. Distributors and sellers were competitive with each other. It was truly a consumer market where interested parties found good discounts. As there were several differences between the boats, the designs and the overall functionality, buyers were able to go to the agents who provided the best price. The Hong Kong boat market has always been price sensitive. No matter how rich the buyers are, they are always interested in making a deal. However, older and more well-known brands were still the most popular at the time, and buyers were wary of buying new brands.
The next economic downturn in 2008 again looks to the industry, but surprisingly, sales haven't suffered as much as people thought, at least in Hong Kong. The main reason for this was China. New customers from mainland China appeared in Hong Kong, who usually preferred well-known European brands that looked luxurious. But due to the lack of support for the shipyard in China, tax and licensing complications, Chinese buyers preferred to keep their boats in Hong Kong.
Hong Kong soon witnessed a new problem in the industry. Since 2001, Hong Kong has not exported many boats abroad, and the continuous influx of small and large boats over the course of a decade soon forced the mooring areas of Hong Kong a little and far apart. Several yacht clubs in Hong Kong were quickly filled. The marinas for pleasure craft, provided by the government in waters protected by wave walls, became full. Space is a rare commodity in Hong Kong. Unfortunately, this aspect is still not taken seriously by the government, who want to avoid possible political confrontations and accusations of spending money to accommodate the rich.
This misconception has so far turned the industry into a bad position. Membership in yacht clubs is booked, and some yacht clubs dramatically increase their membership fees. Berths are in waiting lists, and rent is overpriced. For example, in 2015, at a 60-foot jetty, the rent is almost $ 8,000 per month, and a swing for boats at 50 feet can cost up to $ 3,000 per month. Owning a boat was only for the very rich, who do not really care about how they spend their money.
Other owners of the occasional boats who worked hard to earn their boats have to say goodbye to the rowing hobby, because of the overestimated cost of just mooring the boat.
Since 2009, most buyers of luxury yachts in Hong Kong are in China. Due to tax problems in their country, they prefer to keep their yachts in the port of Hong Kong. But in 2013, the central government of China began a serious corruption corruption in all sectors of the country. This has stopped the sale of many luxury goods in China. Chinese businessmen, who may have been associated with corrupt officials or participated in tax evasion, avoid any unwanted attention they may receive by flashing any luxury products, such as yachts.
The Chinese government has also begun to stop unregulated business lending firms. This is called shadow banking. in finance. This type of high-risk lending has usually been very common. Shadow banking includes company X with the request of an ordinary person to buy investments in which they will give him monthly income with good interest for several years. Then company X takes this money and, in turn, provides it to a developer who promises company X a higher return. Company X also does not check whether the developer is able to pay money if something goes wrong. If a developer loses this money and cannot pay for company X, company X cannot return money to ordinary people. In this case there is also no insurance or salvation from the government, and the average person risks and loses his money. If he had invested in the bank, the risk would have been less, because the banks were regulated, and the government rescued them in case of trouble.
As the Chinese government stopped this type of unregulated lending, many elite buyers who had access to money suddenly found themselves stuck. This has greatly affected yacht sales in Hong Kong since 2013.
Having said that, there are also many other buyers in China who can buy yachts without borrowing mainly from banks. But most of these buyers are not spending there unrealistic amounts of money on club membership and mooring boats in Hong Kong. They are also not interested in paying heavy taxes in China. Therefore, they just do not indulge in a boat. This is even more detrimental to the market.
If this situation continues without any serious action by the Hong Kong government, we will see that the upper middle class will completely leave the boat market. Only the super-rich, or those directors of public companies and managers who spend their investors, will be able to afford the money to buy expensive club clubs and berthing areas. And if, for any reason, the stock or real estate markets fluctuate, the yacht business can suffer greatly. A business will suffer much less if buyers are more diversified and in less debt. The industry would also suffer less if more buyers bought cheaper and smaller boats that were light and not so expensive to store. Then the shipyard will still deal with recessions.
I hope you found this article valuable.
Happy walks
