At the inaugural ceremony of the so-called Free Yacht Travel Scheme between Macau and Zhongshan of Guangdong Province two years ago, the officials of both sides expressed high hopes for this pilot concept, which would introduce simpler and more efficient Customs and other procedures for yachts gliding across the border.
‘The Free Yacht Travel Scheme could facilitate the economic diversification of Macau, support the cross-border business of the industry, and enhance the employment of workers,’ gushed a Macau Government press statement distributed to dozens of local and Guangdong media personnel attending the ceremony.
But more than two years since implementation the scheme has yet to achieve this ambitious vision and has so far failed to deliver a satisfactory take-up by ‘yachties’, with fewer than 10 applying for the scheme. Although both Macau and Guangdong – together with Hong Kong – aim to further extend the programme to other places, pundits say it will not happen without more backing from the central government.
According to figures from the Marine and Water Bureau of Macau, a paltry seven applications have been recorded in these two years – all the yachts sailed from Zhongshan to the city and all in the last quarter of 2016, when the scheme had newly been launched. This means that no Macau yacht has travelled to Zhongshan under the scheme, which has received no new applications since early 2017.
Lao Nga Wong, a Macau tourism industry figure and a local deputy of China’s top political advisory body, the Chinese People’s Political Consultative Conference, has pointed out that several problems were apparent from the get-go regarding the yacht scheme.
“If [Macau yachts] want to berth in the Mainland, they still have to undergo a series of approval and clearance procedures from the authorities [regarding] transport, security, Customs and inspection,” he said. “Besides different charges required for the administrative procedures of different government departments [yacht] owners still have to pay a whopping deposit, equalling about 40 per cent of the yacht’s value.”
For instance, an owner has to pay a deposit of RMB4 million (US$576,078.4), which will be refunded, for a yacht costing RMB10 million to enter the Mainland, in addition to other administrative charges.
Number of yachts now registered in Mainland China
Believing the Free Yacht Scheme could boost tourism development in the region, Lao believes the central government could help concoct a long-term strategic blueprint and set up more detailed measures for the development of the Free Yacht Travel Scheme for Guangdong, Hong Kong and Macau.
The deposit amount should be lowered or the authorities could accept letters of guarantee issued by banks, issuance companies, or reputable industry associations, he suggested. The three jurisdictions could also mull setting up a taskforce to handle the declaration, Customs clearances and administrative procedures of yachts sailing the region, he added, because “these all could help enhance the efficiency and convenience of the yacht travel scheme.”
Despite the dismal outcomes so far, the Free Yacht Travel Scheme is a key regional tourism co-operation initiative. The idea first arose in March 2011 when the authorities of Macau and Guangdong inked a co-operation framework agreement spelling out that the two places should join forces to develop ‘exquisite tourism projects of cruise ship and yachts’. This vision started to take shape when it was first mentioned in the Macau Government’s Policy Address for 2012, which announced that Free Yacht Travel Scheme studies would be conducted by the two sides.
Following the signing of a memorandum in 2013 – and years of discussion – the pilot stage of the scheme was implemented between Macau and Shenwan Town, Zhongshan in November 2016.
Number of yachts applying for free travel scheme between Macau and Zhongshan since 4Q2016
Given the proposal of the Guangdong-Hong Kong-Macau Bay Area, further integrating nine Guangdong cities and two Special Administrative Regions from social to economic perspectives, in recent years there has been talk of a broader Free Yacht Travel Scheme involving the three jurisdictions. This idea received a boost in 2017 when the Chinese Ministry of Transport – together with the Ministry of Public Security, the General Administration of Customs and the General Administration of Quality Supervision, Inspection and Quarantine – jointly approved testing the scheme in the Nansha Area of Guangzhou, Hengqin Area of Zhuhai and Qianhai and Shekou Area of Shenzhen of the free trade zone in Guangdong.
In Macau’s Policy Address for 2019, the Administration states it will ‘continue to deepen tourism co-operation in the Bay Area, including expanding the scope of the Free Yacht Travel Scheme and improving relevant services.’
The Macau Government has been in talks with other Guangdong cities besides Zhongshan about extending the scheme, namely the three areas in the free trade zone: no consensus has been reached, however, due to issues like charges and taxation.
Speaking on condition of anonymity, an industry figure is not surprised that the yacht scheme has so far failed to achieve its vision. “Like many other regional co-operation initiatives, it has never been easy,” said the figure. “It requires all sides having common goals and mutual interests, and willing to compromise, when needed, on a wide range of issues.”
The figure added that the two berths capable of receiving yachts in Macau – namely, one in Coloane and one in Macau Fishermen’s Wharf – are ready to welcome more yachts from the Mainland. Yachts sailing between Zhongshan and Macau could reach at least “double digits” a month if charges are lowered and the deposit scheme changed, laims the figure, who believes the scheme can only be pushed forward more rapidly with the intervention of and more guidance from the central government.
A similar sentiment is echoed by Li Wenxuan, Secretary-general of the Guangdong Yacht Industry Association, who points out that the development of the Free Yacht Travel Scheme of Guangdong, Hong Kong and Macau requires more support from Beijing.
Speaking at a yacht fair held in Macau in November, the industry expert noted: “The implementation of the [yacht travel] scheme has so far not been ideal: it has failed to streamline administrative procedures in some cases and also created additional costs [for yacht owners].”
Acknowledging that there is marked demand in the region for yacht travel, Li added: “Local Administrations can only implement the orders they have received from the top. Without more policy support from the central government, it’s difficult to push forward the scheme in the Bay Area.”
30 per cent growth
Due to the push of the central government in recent years to facilitate yacht tourism the yacht industry in Mainland China has maintained an annual growth rate of no less than 30 per cent since 2015.
This estimate – unveiled by the Guangdong Yacht Industry Association earlier this year – foresees the size of the industry from yacht trading to clubhouse management to manufacturing reaching between RMB135 billion (US$19.44 billion) and RMB675 billion within the next five years.
Despite economic fluctuations across the globe and a widespread anti-corruption campaign on the Mainland – where signs of luxury and wealth like owning a yacht might be seen as taboo – the sector started to see a turnaround in 2015, when the Chinese State Council promoted the yacht industry in an official document as one of the means of facilitating the tourism sector, said the Guangdong Association.
According to the Guangdong group, there are now some 110 yacht clubs, nearly 1,200 yacht trading companies and about 200 yacht manufacturers on the Mainland.
‘There is still so much room for growth, as the [yacht] sector is turning from luxury to more mass appeal,’ claims the Association.
It is also the same observation by the China Association of National Shipbuilding Industry, which credits the Mainland’s burgeoning middle class. In a report by Chinese state-run newspaper People’s Daily earlier this year, the Association said the sector could only sustain growth if it transits from the luxury sector to the mass sector.
The sector is now undergoing a transition period, having enjoyed rapid growth from 2000-2012, the Association noted, adding that the 4,000 yachts currently registered on the Mainland grew from 3,000 in 2012, and that most yachts are now located in the coastal cities of Guangdong and Hainan.