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…)

The handling capacity of China’s ports is expected to hit 8 billion tons and 170 million TEUs in 2010, according to information from the on-going China Ports and Terminals Summit held in north China’s Tianjin Municipality.

China’s ports cargo handling capacity totaled 5.6 billion tons and 93 million TEUs in 2006, both the biggest in the world for four consecutive years, said Qian Yongchang, head of the China Communication and Transportation Association, at the summit on Tuesday.

Xinhua reported that last year, China had 12 ports with throughput capacities exceeding 100 million tons.

Qian said China has been investing heavily in port construction as the national economy sores and foreign trade increases steadily.

In 2006, more than 160 construction projects kicked off on China’s seaports, involving 60 billion yuan, up 30 percent year-on-year. (more…)

The Shanghai Daily is reporting that Shanghai Port is now the second biggest port in the world for containers. According to the paper, the port handled 5.89 million TEUs in the first quarter of 2007, an increase of 28.1 percent from 2006. It now ranks second behind only Singapore for throughput of containers. The Yangshan Deep-Water Port, the main powerhouse of Shanghai’s port industry, handled 1.22 million TEUs in the first three months of the year. (more…)

China’s marine sector contributed US$272 billion or 10.01 percent of the country’s gross domestic product (GDP) last year according to a report on the nation’s marine economy in 2006.

The report, issued by the State Oceanic Administration (SOA), said that last year’s output value of marine industries - fishing, transport, oil and gas exploitation, tourism and shipbuilding - rose 13.97 percent year on year. That growth rate was 3.3 percentage points higher than that of China’s overall economy. (more…)

Pudong International Airport (PVG) ranked as the sixth largest in the world for freight in 2006, handling some 2.16 million ton of cargo according to the Airports Council International.

Pudong jumped two spots from last year on a rapid increase, 22.3 percent, of freight flights in 2006. In 2006, the airport handled 35,587 freight flights, accounting for 15.3 percent of the total flights. Eighty-five percent of the freight flights were from overseas.

The airport is accelerating its expansion project, having already added ten more freight storage units in 2006, and is now building another freight area - set to become one of the four logistics parks in Shanghai. The public goods store station is expected to be complete by the end of the year.

Currently the five leading airports for cargo are Memphis International Airport (MEM) in the US, Hong Kong International (HKG), Anchorage International (ANC) in the US, Incheon International Airport (ICN) in Seoul, South Korea, and Narita International Airport (NRT) in Tokyo, Japan.

Zhangjiagang is a city of some 900,000 people on the Yangtze, around 90 minutes by road northwest of Shanghai. The city’s GDP in 2005 was RMB70.5 billion (about US$10,000 per capita), and it now host to some 1,300 foreign invested enterprises. It is notable for having the only inland free trade zone in China, the only FTZ fully integrated with a port, and the only FTZ focusing on chemical logistics. The city also has one of the new bonded logistic zones. Its port capacity is now 84m tons, and it is a major distributing point for timber, steel and chemicals, as well as containers, and also a key trans-shipment port for cargo going west, up the Yangtze in smaller vessels and barges.

The local government is keen to build on its existing strengths, notably by attracting more foreign investment into its logistics capabilities. And according to free trade zone officials, the city is in the process of applying to the central authorities for free port status, similar to that already available at Shanghai’s Yangshan port. However, the timescale for potential approval is not yet known. In addition, the FTZ and port are keen to pursue a long term aim of “connection” with Shanghai’s Yangshan port. Officials suggested this might in due course, for example, allow an export consignment to clear customs at Zhangjiagang and then travel by bonded transport to Yangshan for shipping. Although these ambitious plans have still to come to fruition, Zhangjiagang seems to be somewhere to watch. (more…)

On the islands of Xiao Yangshan and Da Yangshan, some 30km south of Shanghai, Phase 1 of this major new facility opened in December 2005, with five containership berths. The port lies at end of the 32.5km Dong Hai oversea bridge. It is expected to have a throughput of 3m TEUs by the end of this year, primarily from Europe-China lines transferred from Waigaoqiao port. Phase 2 with a further four berths will be complete by the end of 2006, at which time lines to North and South America will transfer. Major construction work was visible during our visit. By 2010, there will be 15 berths, with a total annual capacity of 10m TEU – by 2020, the facility will have 53 berths.

The port is also now a state-level free port, China’s first, and covers an area of 7.2 sq km in three parts – 1.2 sq km in the port, the 32.5km Dong Hai Bridge itself, and a 6 sq km area at the north end of the bridge in Lingang New Area. This free port is the most open area yet created in China and within these areas existing policies applied to bonded zones, export processing zones and bonded logistics parks will be implemented import duty and taxes are suspended until the goods are removed from the free port into the domestic market domestic goods shipped into the free port are considered exports and entitled to tax refunds goods transactions within the free port are not subject to VAT and consumption tax. (more…)