| 25 | Apr |
| 2013 |
On-shoring trend is overhyped, say shipping executives
The shift of manufacturing and outsourcing to China, which started after the country joined the World Trade Organization (WTO) in 2001, has probably ended. But the scale of the move back to production in Europe and the Americas has been exaggerated, a senior shipping executive said. Andy Tung, Chief Executive of Orient Overseas Container Line, said: “China will still remain competitive, at least for a period of time.” “There is a supply chain infrastructure in China which is not easily replicated [in other markets'],” Tung told shipping executives at the Sea Asia conference in Singapore. Onshoring – the relocation of manufacturing back to countries closer to key Western markets – “is a bit overhyped”. Tung’s views were echoed by other container shipping industry executives. Teo Siong Seng, Managing Director of Pacific International Lines, said a meeting of company managers in Shanghai two weeks ago found some cargo production was returning to China after being shifted outside the country. This was because the total cost in terms of logistics and shipment reliability was cheaper in China. But Kenneth Glenn, President of Singapore’s APL, said: “I think Latin America is already [benefiting] and will continue to benefit from near-sourcing. Manufacturing in Latin America for North America and some domestic markets is clearly on the rise. The Middle East near-sourcing market is also developing.” The executives also voiced concerns about weak cargo growth, a possible oversupply of new ships and mounting environmental issues. Teo said intra-Asia container traffic had already outstripped transpacific volumes. He forecast that container volumes within Asia and between Asia and the Middle East would grow to six times current levels by 2030. “China will put more emphasis on trade between Asia and Africa,” he said. Thomas Riber Knudsen, Chief Executive of Maersk Line Asia Pacific, said the outlook for trade growth on Asia-Europe and transpacific routes remained gloomy. “There will be no return to a 5% trade growth,” he said. Instead, he forecast “low single-digit growth in the Pacific [this year], picking up in 2014”. He said the conditions facing container shipping were the “least bad” compared with the dry bulk or tanker markets, but that the sector was still fragile. Trade patterns were also changing, Riber Knudsen said. He said that in recent years 10% of container volumes from Asia to the U.S. east coast had gone via the Panama Canal. “By the end of this year, about half of all Maersk’s services will use the Panama Canal to the U.S. east coast,” with about 50% via Suez, he said, as reported in the South China Morning Post.
| 28 | Mar |
| 2013 |
Hefei expanding as business hub
Hefei is 500 kilometers inland from Shanghai, but the provincial capital of Anhui province has ambitions to become a player in the business world. Over the past year, it has defied the national decline in foreign direct investment (FDI), and already attracted multinationals such as Unilever, Coca-Cola and Hitachi Construction Machinery to set up shop, thanks to lower wage and land costs, according to city Mayor Zhang Qingjun. Now it plans to build on those gains by rolling out an infrastructure program of road, water, power and rail networks to lure more business from the coast. “The trend of businesses moving inland from coastal regions is becoming very clear,” the Mayor said. “Our priority is to establish high-end manufacturing as well as research and development facilities.” The migration of funds to Hefei is reflected in the CNY43.9 billion in direct investment in the city in the first two months of the year. That amounted to a 20% year-on-year increase, with 94% of the total coming from other provinces, he said. Over the same period, Hefei’s exports more than tripled year-on-year while China’s exports rose by less than a quarter.
| 31 | Oct |
| 2012 |
Xian Park to become largest inland port in Western China
The Xian International Trade and Logistics Park will play a vital role in the modernization of China’s western areas and will help close the gap with the more-developed eastern coastal regions, said Han Song, Deputy Mayor of Xian. It is set to become the largest inland port in West China and help build an open economy in the whole western area. Foreign trade volume in the park has been increasing at an annual rate of more than 50% since it was set up in 2008 with a planned area of 44.6 square kilometers. The inland port functions through the synergy of three projects – the Xian Railway Container Transport Center, the Xian Comprehensive Free Trade Zone and the Xian Highway Hub. The Xian Comprehensive Free Trade Zone enables northwestern China to have the same advantages in processing trade and free trade logistics that coastal ports have, which has reduced the cost of and time needed for foreign trade done in inland China. Meanwhile, it also provides favorable conditions for inland areas to develop an outbound economy and modern services, such as international trade and outsourcing. The Xian Railway Container Transport Center project is a key link that allows China to promote international container transport in inland China. The Xian Highway Hub project can integrate such functions as transportation management, shipment, logistics and information, and it can provide comprehensive services for logistics enterprises in the region. The park has also established strategic relations with some major coastal ports, such as those in Shanghai, Tianjin and Lianyungang in eastern China, and the border ports of Horgos and Alataw Pass in Xinjiang in western areas of China, the China Daily reports.
As of the end of August, total fixed-asset investment in the park had reached CNY10.3 billion, of which CNY4.2 billion was made during the first eight months of this year, an increase of 78.14% over last year. Total foreign trade volume reached USD519 million, of which USD235 million was made between January and August, an increase of 56.2%, compared with last year. About 58,000 containers were handled during the first eight months of the year at the railway container transport center that serves all of Shaanxi province and the surrounding provinces. Contracts have been signed involving a combined investment of CNY51 billion in a total of 58 projects of various types, including eight foreign invested projects with a total investment of USD350 million. By the end of August, 16 projects had been completed and 39 projects, with a total investment of CNY65 billion, were under construction. Activities to attract foreign investment were held in foreign countries, including Japan, Turkey and the Netherlands. By the end of August, investment worth a total of CNY2.4 billion had been poured into the park to develop infrastructure, including bridges, electricity and water treatment plants. To make up for the shortage of land, the area of the park may be enlarged to 120 square kilometers, according to the management committee.
| 15 | Dec |
| 2011 |
Central government to invest CNY500 billion in Yunnan gateway
The central government plans to invest more than CNY500 billion to make Yunnan a Southeast Asian gateway. “Yunnan is our nation’s land passage to Southeast Asia and South Asia. Its strategic position is very important,” the government said. Authorities want to improve the province’s transport, logistics, energy, waterways and information infrastructure by 2015, and to complete several links to Southeast Asia by 2020. The central government has called for the completion of a railway linking Kunming, Yunnan’s capital, Changsha, and Hangzhou as well as a line between Dali in Yunnan and Ruili on the China-Myanmar border. It also wants expressways built, including one between Kunming and Guangzhou. In addition, it designated the new Kunming airport as a major aviation hub for western China, with auxiliary airports in cities including Lijiang, Dali and Shangri-La. In July, the Ministry of Transport signed a partnership agreement with Yunnan supporting the province’s plan to invest CNY500 billion in 126 projects to transform the province into a transport hub by 2015. This was two months after Yunnan Highway Investment, an investment arm of the Yunnan government, announced it could not repay CNY90 billion in bank loans for highway construction projects. “China is trying to accomplish several goals via infrastructure and energy projects in Yunnan. One goal is to decrease dependence on the Straits of Malacca, where 80% of its oil imports currently pass through,” Paul Donowitz of Earthrights International said.
| 05 | May |
| 2011 |
Shipping data points to rise of new manufacturing hubs
The role of Guangdong and Hong Kong as the world’s manufacturing and export powerhouses may be on the wane as China’s inland cities grow into new manufacturing hubs. Weak shipping data for Hong Kong and Shenzhen in the first quarter of this year already show a decline as the world’s leading ports, and an upcoming rail service from central China to Germany could accelerate that fall. Later this year, DB Schenker hopes to gather enough customer interest to start a regular container rail service between China and Germany once or twice per week. Container throughput at the 10 leading Chinese ports grew 12.3% on average in the first two months of this year. By comparison, the container throughput of Shenzhen, the world’s fourth-largest port, rose just 3.6% to 5.1 million TEU, according to the Shenzhen Ports Association, while cargo throughput fell 2.3% to 50.3 million tons in the first quarter. The container throughput of Hong Kong, the world’s third-busiest container port, rose 2.4% to 5.6 million TEU in the first quarter, according to the Hong Kong Port Development Council. “In the coming years, Hong Kong and Guangdong ports will continue to see weak performance because of the shift of factories away from the Pearl River Delta,” said Willy Lin, Chairman of the Hong Kong Shippers’ Council. In contrast, container throughput in Shanghai, the world’s busiest port, jumped 12.3% to 7.3 million TEU in the first quarter, while its cargo throughput rose 9.1% to 111.4 million tons, according to the Shanghai International Port Group, Shanghai’s port operator. Manufacturing in the Yangtze River Delta, served by Shanghai, has not suffered as it has in the Pearl River Delta, because Yangtze River Delta companies ship higher-value, less labor-intensive goods and the factories enjoy economies of scale because they are larger than the Hong Kong-owned factories in the Pearl River Delta, Lin said. Factories in central Chinese cities such as Chongqing and Chengdu will ship goods through Yangtze River ports such as Shanghai and Ningbo, not Hong Kong or Shenzhen.
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