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.

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.

Established in 2007, the Bohai Sea New Area is located in southeast Hebei province south of Beiijng. It includes Huanghua city, Zhongjie industrial park, Nandagang industrial park and a chemical industrial park. It covers 2,400 sq km, with 130 km of coastline. The Area has a population of 550,000. A promising new economic center, it includes Huanghua port, which will cover 80 sq km and have 209 berths. It will have sections for coal and bulk-cargo, in addition to comprehensive port areas. Huanghua port opened on August 18 with a 100,000 ton capacity, which will be extended to 250,000 tons. It hopes to become northern China’s key shipping center at the eastern end of the new Eurasia continental bridge. The port serves 43 inland cities covering 1 million sq km with a population of 140 million, and a gross domestic product (GDP) of more than CNY2 trillion. Analysts predict Bohai New Area will have an annual output of 30 million tons of new materials, 10 million kW of electricity, 20 million tons of refined oil and 10 million tons of pipeline equipment within five years. The local government is working to transform the area into a regional logistic center, the China Daily reported.

The Guangxi Zhuang Autonomous Region is building ports, railways and roads to expand its trade with Vietnam and other Southeast Asian nations. Over the next two years, CNY150 billion will be invested in infrastructure in the Beibu Gulf Economic Zone, a region in Guangxi that includes the three ports of Fangchenggang, Beihai and Qinzhou, as well as the region’s capital, Nanning. The biggest investor in Fangchenggang is Hong Kong. The port’s cargo capacity will increase from 60 million tons at the end of this year to 100 million tons by 2015, said Fangchenggang Port General Manager Xie Yi. Chongzuo, a few hours drive from the Sino-Vietnamese border, is connected by road and rail to the Friendship Pass on the border with Vietnam. During the first half of the year, Chongzuo’s international trade soared 68.53% to USD1.5 billion.

“We plan to expand Nanning airport and add flights to Europe to make Nanning an international hub,” Nanning Vice Mayor Xiao Zhigang said. An additional CNY6 billion will be invested in the airport. A similar amount will be invested in the construction of the 160,000 square meter Nanning East railway station. In 2009, Nanning’s investment in fixed assets rose 50.5% to CNY104.4 billion, while its industrial output rose by 12.1% to CNY117.6 billion. Guangxi’s trade with Asean has risen almost fivefold from USD1 billion in 2004 to USD4.95 billion in 2009. The region’s fixed asset investment rose 50.8% to CNY570.7 billion in 2009, with 646.68 kilometers of railway and 213 km of expressways built. Qinzhou is another port on the south coast of Guangxi undergoing rapid expansion. In the first half, container throughput  rose 140% to 109,000 TEU, while its cargo throughput rose by 56.1%  to 14.16 million tons. Cargo capacity will be raised to 100 million tons by 2011. Hong Kong accounts for most of Qinzhou port’s cargo, while Asean is second with a 40% share.

Germany’s auto transport firm BLG Logistics plans to cooperate with Chinese car maker Geely to set up a logistics hub in Ningbo in Zhejiang province as it seeks to further tap the huge potential in the Chinese vehicle market. Geely’s auto parts suppliers can send their products to the logistics hub and BLG will transport these parts to Europe after they are completely knocked down. BLG’s clients include Mercedes Benz, BMW and Porsche. “We are still talking with Geely about the cooperation mode, and we are willing to invest in the logistics hub,” said Detthold Aden, Chairman of BLG. Of the 3 million cars delivered by the German firm last year worldwide, only 8,000 units were from China. Chinese car makers exported 47,100 vehicles last month, an annual rise of 18.45% and a surge of 95.99% from a year earlier, according to the China Association of Automobile Manufacturers. Aden said the Eastern European auto market will surge 170% and has advised Chinese car makers to develop the market there.

BLG is actively contacting automakers including Great Wall, Chang’an, BYD and Huatai to provide logistics services in European markets. The company has already helped Chery transport thousands of cars from China to Russia,offloading at Bremerhaven harbor, where BLG’s headquarters is located. The 133-year-old company also helped BMW’s Chinese joint venture partner, Brilliance, to be the first Chinese company to sell cars in Western European countries. Chinese auto brands Chery, Great Wall and Geely, now have a small share of the Russian and Ukrainian markets. As they expand market share, BLG is making a huge investment to expand its logistics network into Eastern Europe. BLG is also assisting Daimler AG transport vehicle parts from its suppliers in Spain to the German automaker’s plant in Fuzhou.