Nov. 29 - The number of container units (TEUs) handled by mainland ports this year hit 100 million yesterday.

“China’s container transportation has reached world levels both in handling efficiency and building networks, greatly contributing to the prosperous shipping industries of Northeast Asia and the world,” Xu Zuyuan, vice-minister of communications, said yesterday at a ceremony in Tianjin Port held to celebrate the milestone.

To date, one of every two containers traveling along shipping lines in the Pacific is from China, with the country also manufacturing 90 percent of the world’s containers, he said.

According to China Daily, throughput of cargo and containers at Chinese ports has been the largest in the world for the past five years, with an annual growth rate of 35 percent.

China has come a long way since September 1973 when the first overseas container reached the mainland at Tianjin Port, which later set up the country’s first container berth in 1980. The 90s saw rapid growth in the container transportation industry, and in 2002 China overtook the United States to become the world’s top handler of containers. (more…)

SHANGHAI, Nov. 27 - Express shipping and logistics giant, DHL has signed a deal to invest US$175 million on a North Asia hub to be located at Shanghai Pudong International Airport. The move aims to increase the company’s Asia Pacific scope and cement its market leadership in China.

This is the second cargo brand to invest in the airport, after UPS announced plans to build its own 96,000 square meter hub by next year, making it the first in the world to be equipped with two international cargo hubs.

Daniel McHugh, chief executive officer of DHL Express Asia Pacific, told Cargonews Asia that the announcement, “underlines DHL’s strong commitment and confidence in the Shanghai government’s vision of establishing the city as a world economic center, as well as the Shanghai Airport Group’s objective of building Pudong International Airport as the international air hub of choice.”

“Our task as a global logistic provider is to network the world. We are confident that the new hub will give us an even greater competitive edge in managing the huge and complex global trade that is being routed to this region,” he added.

The North Asia hub is scheduled to be operational by the second half of 2010 and will be located nearby the airport’s soon-to-be-completed third runway. It will join the ranks of the company’s five other hubs serving the region: Hong Kong, Bangkok, Incheon, Singapore and Sydney. (more…)

Oct. 12 - The State Council moved ahead with plans for the country’s fourth bonded port in Hainan province Xinhua reported yesterday, yet another of the steps China is taking towards establishing a free trade zone with the Association of Southeast Asia Nations (ASEAN).

The Yangpu Bonded Harbor Area in the Yangpu Economic Development Zone, located near the city of Haikou and covering 9.21 square kilometers, will be completed in three stages, the first phase of which has already begun construction, said Hainan vice governor Jiang Sixian.

Construction is estimated to cost upwards of RMB50 billion and the area will host industries with a total output value of RMB100 billion, generating RMB12 billion in taxes annually by 2012. According to Jiang, the port will be transformed into a logistics center for oil, natural gas, chemical materials and paper pulp, as well as being a key processing base for chemical products in the country. (more…)

SHANGHAI, Oct. 10 - The central government has given the Beijing-Shanghai high-speed railway the green light according to a notice posted on the National Development and Reform Commission’s website Tuesday.

With a speed of up to 350 kilometers per hour, the high-speed train would shorten rail travel times between Beijing and Shanghai from the current 10 hours to less than five.

The project, which has been on the drawing board for more than a decade with work expected to begin last year, was to be operational by 2010 before construction was postponed. The cost of the project, with initial estimates ranging from RMB130 billion to RMB170 billion, could exceed RMB200 billion due to rising real estate prices and the cost of resettling people who live along the proposed path.

The 1,318 kilometer rail project has attracted the attention of France’s Alstom, Canada’s Bombardier, Japan’s Kawasaki Heavy Industries and Germany’s Siemens, all vying to provide technology. It’s expected that high-speed wheel technology, like that used in Europe, Korea and Japan, will be employed over more the costly magnetic levitation that currently is only used on a tester extension in Shanghai. (more…)

By Andy Scott

SHANGHAI, Sept. 11 - China’s new policy restricting processing trade, which took effect nationwide August 23, will most heavily impact Guangdong province. The booming Chinese economy, which has grown at over 10 percent for the last 15 years, has been largely driven by processing trade factories located in South China and the Yangtze River Delta region, importing tax-deductible raw materials to manufacture finished products for export. Of the over 90,000 processing trade firms operating on the mainland, nearly 70,000 are located in Guangdong province according to the National Bureau of Statistics.

However, in its continued efforts to develop the central and western regions which have not profited from China’s economic surge, Beijing has stipulated that the new regulations will not affect enterprises operating in those regions.

With that in mind, we decided to take a look at central China, an area that includes the six provinces of Anhui, Henan, Hubei, Hunan, Jiangxi and Shanxi. It includes 30 airports, 12 inland ports, 460,000 kilometers of highway and approximately 15,000 kilometers of railway. Would it be better for processing trade manufacturers to move their operations inland, or look for other possibilities to dealing with Notice 44? (more…)

Sept. 1 - Yingkou is a third-tier Chinese city located on the northeastern edge of the Bohai gulf, just a few hours drive from the regional powerhouses of Shenyang and Dalian. An otherwise fairly ordinary provincial Chinese city, Yingkou is set to capitalize on the increasing exporting power wielded by enterprises in Liaoning, Jilin and Heilongjiang provinces.

Most people associate Liaoning province with the port city of Dalian. Indeed Dalian is a thriving, cosmopolitan city that possesses one of the largest ports in China. The city of Yingkou has been left in the shadow of its big brother further down the peninsula and has not attracted the levels of foreign investment seen around many other ports in China. In particular, export processing has not flourished in the area, leaving Yingkou lagging behind many other ports in China in terms of its degree of internationalization. Recently however, the volume of traffic through the ports – Yingkou Old Port and Bayuquan New Port – has risen dramatically, with over 100 million tons of cargo expected to be handled in 2007. This expansion is attracting the attention of foreign investors due to the proximity of the inland manufacturing giant that is Shenyang, China’s fourth largest city by population.

Yingkou is, and will remain, primarily a port responsible for the processing and transportation of products manufactured in the heartland of Liaoning (the cities of Shenyang, Fushun, Benxi, Haicheng, Liaoyang etc.). However, it is also strategically important for the distribution of oil, grain and fertilizer around China. Two pipelines connect Yingkou with the Daqing oilfields of Heilongjiang province, and Bayuquan port is expanding its capacity for oil storage in anticipation of further future growth. (more…)

Guangzhou Baiyun International, China’s third busiest airport after Beijing and Shanghai, is expanding its efforts to become an international air cargo and logistics hub in prosperous South China.

China Daily reported that international logistics companies will play a larger part in reaching the goal, according to Liu Zijing, president of the Guangdong Airport Management Group Co Ltd.

Liu said that the airport would soon introduce a safety and credit cargo agent system to offer better services to companies from around the world.

The airport signed two agreements with international cargo giants late last week. Schenker China Ltd, one of the world’s leading logistics companies, will ship more than 20,000 tons of cargo through the facility from 2007 to 2008, some 5 percent of the airport’s total. Bax Global, part of the new global logistics powerhouse of DB Logistics, said it will also increase its volume. (more…)

The Tianjin Bonded Zone is seeing a lot of construction these days as the port is dredged and streets leading to the zone are dug up to lay cables and pipelines for telephone, electric and gas facilities to feed the new logistic parks under construction.

By the end of 2007, according to an article in Cargonews Asia, the first batch of six container berths with a draught of 18 meters will be completed at Tianjin’s Dongjiang port. The sixth berths, run by a joint venture of Tianjin Port and PSA of Singapore and costing US$871.5 million, will have a capacity of four million TEUs a year.

The article goes on to say that the current bonded port and zone will become the Dongjiang Free Port and the Tianjin Free Trade Zone, according to a blueprint drawn up by the Tianjin municipal authority.

The current Tianjin registered an annual growth of 30 percent since it began operation in 1991, making it the top bonded zone in the country for four years in a row in terms of foreign investment as well as input of fixed assets. The zone’s GDP grew 34.7 percent in the first five months of this year with imports and exports rising nearly 30 percent to US$12.2 billion. (more…)

The Grand Canal, a 1,800 kilometer-long waterway stretching from Beijing in the north to Hangzhou in the south linking six of China’s river systems - the Yellow, the Huai, the Qiantang, the Wei, the Hai and the Yangtze - is seeing a revival of conservation efforts following the establishment of a national organization to protect the world’s oldest canal system.

Conservation of the canal was on the agenda at the most recent meeting of China’s top political advisory body - the Chinese People’s Political Consultative Conference. The body has been pushing to have the canal listed as a UNESCO World Heritage site within five years. But conservation of the waterway could prove difficult. Stretches of the northern most sections of the canal have dried up or become impassable pools of wastewater. Today only 1000 kilometers of the canal remains in operation.

David Lague reported yesterday in The New York Times that a US$250 million makeover that began in 2001 has improved water quality and spurred urban renewal and a small 24-mile section of the canal near Hangzhou, but that cleaning up the entire canal could take years and cost as much as US$2.5 billion. (more…)

The second tier cities that line the Yangtze River are seeing increased foreign investment as international companies look to move out of the Yangtze River Delta with its high rent and labor costs. As China Briefing pointed out in our November 2006 issue, for export-based businesses in central China, the burden of increased transportation costs and existing monopolies in the region make moving inland less feasible for all but a few major international businesses. However, the Yangtze port cities of Nanjing and Wuhan, as well as the lesser known ports cities of Taicang, Zhangjiagang and Changzhou are showing rapid growth and expansion and, based on FDI figures, look to be encouraging increased foreign investment.

The gross domestic product of the 16 cities in the Yangtze River Delta grew by 16.4 percent last year to nearly 4 trillion yuan, according to the Yangtze River delta research center under the Jiangsu provincial bureau of statistics. The GDP of the 16 cities stood at 3.9526 trillion yuan accounting for 18.9 percent of China’s total. The YRD and the greater Yangtze River region should continue to see strong growth with FDI increasingly moving up river towards the second tier cities along its banks. (more…)