The Xian International Trade and Logistics Park aims to become “the largest inland international port, the largest trade and logistics center in the upper and middle reaches of the Yellow River and a new base for the modern services industry”. It comprises eight functional areas: the container operation area, the comprehensive free trade zone, the domestic trade area, the comprehensive services area, the residential area, the logistics area, the industrial area and the coordinated urban-rural construction area. It has convenient railway, highway and air transportation links. The Xian Comprehensive Free Trade Zone, covering an area of 6.18 square kilometers, is the only free trade zone in the northwestern region of China. It is supported by the logistics and port functions of the trade and logistics park. Xian Vice Mayor Han Song said that the functions of a normal port, such as customs clearance, could be performed just as well inland, where there is convenient access to railway infrastructure. “Thanks to the Xian International Trade and Logistics Park, all export-oriented enterprises in the northwestern region will no longer have to go to coastal ports to complete customs procedures, and in Xian, they could also enjoy all policy benefits, such as tax rebates. Furthermore, processing enterprises could move their production to this inland region,” Han said. To provide easy and convenient transportation, the park enjoys the full support of the Xian railway container transport center, the Xian bonded logistics center and the Xian highway hub, and it has also established “strategic cooperative relations” with the major coastal ports in Shanghai; Tianjin; Qingdao and Rizhao in Shandong province; Lianyungang in Jiangsu province; and the border ports of Horgos and Alataw Pass in Xinjiang. The park also established offices in Istanbul and Rotterdam.

Contact information:  Administrative Committee of the Xian International Trade and Logistics Park, No 6 Gangwu Avenue, Xian International Trade and Logistics Park, Xian, Shaanxi Province, postal code: 710026 Website: www.itl.gov.cn Telephone: 86-29-83591918 (daytime), 86-29-83332466 (nighttime).

The Ministry of Transport warned that transport infrastructure funding faces difficulties this year, after investment in roads, railways and other transport infrastructure all fell in the first quarter. “We are not optimistic about the ability of local governments to contribute their share of funds,” the Ministry said. During the first quarter, fixed asset investment in highways and waterways fell 7.7% year on year to CNY185.4 billion. Investment in road construction dropped 9.5% to CNY157.5 billion; investment in rural road construction decreased 8.8% to CNY18.6 billion. Investment in rivers and waterways plummeted 43.7% to CNY8.4 billion. In the first quarter, fixed asset investment in the sector fell 10.2% year on year in the east, 12.9% in central China and 2.9% in the west. Fixed-asset investment in China’s railways plunged 51% to CNY59.63 billion during the first quarter, according to the Ministry of Railways (MOR).

A reform that was designed to ease tax burdens on some logistics service firms ended up levying increased payments. A poll conducted recently by the China Federation of Logistics and Purchasing showed that two-thirds of 120 corporate respondents paid more under the new business-tax regime since the new rates took effect in Shanghai on January 1 under a pilot scheme. The service firms, including logistics service providers, were subject to a sales tax of 3% before the reform. This percentage was based on the value of their total sales. The trial program that got under way for locally based logistics firms in Shanghai abandoned the tax on sales and replaced it with a value added tax (VAT), levied at a rate of 11%. The change was supposed to reduce their tax rates. The Federation’s survey showed that 67% of respondents were hit with tax bills of more than CNY50,000 for January alone, while 24% had to pay additional tax of more than CNY100,000. “The new tax regime has given logistics companies a lot of trouble,” said Zhou Zhicheng, Researcher with the Federation, who conducted the survey.

Industry players expect modest single-digit annual growth for Hong Kong’s logistics sector in the next five years, despite Chinese officials asking the city to join Shenzhen’s CNY285 billion plan to develop a global logistics hub by 2015. The growth of Hong Kong’s external merchandise trade will slow to 6% this year from 11% due to the uncertain global outlook, said R. Gopal, Vice President of Frost & Sullivan, an international market research firm. After enjoying 23.3% growth in 2010, Hong Kong’s air cargo traffic was expected to drop 4.6%, Gopal said. “Hong Kong’s air cargo traffic will grow marginally by 1% to 3.98 million tons this year. Air cargo has been affected by uncertainties in the U.S. and Europe.” The firm predicts Hong Kong’s sea cargo volume will rise 5.5% to 293.8 million tons this year. It says that from 2011 to 2016, Hong Kong’s logistics industry is expected to have a compound annual growth of 6.7% to reach USD40.58 billion. After taking out inflation, the real annual growth rate of Hong Kong’s logistics will be cut about two percentage points to 4.7%, Gopal estimates. Single-digit growth of Hong Kong’s logistics industry in the next five years would be better than the past six years, which saw only 1.7% average growth. “If Hong Kong’s logistics industry has a real growth of 5% each year, that will be great,” said Anthony Wong, past President of the Hong Kong Logistics Association. The Shenzhen government wants to increase Shenzhen’s value-added logistics output to CNY150 billion by 2015. In 2011, it rose 14.5% to CNY110 billion, accounting for more than 10% of the city’s GDP, according to official data. Foreign direct investment (FDI) in Hong Kong’s logistics sector will increase from USD4.52 billion last year to USD4.73 billion this year, Gopal predicts. In 2011, China’s logistics revenue grew 12.3% to CNY158.4 trillion, 2.7 points slower than 2010, the South China Morning Post reports.

China Investment Corp (CIC) has teamed up with Global Logistic Properties (GLP) to set up a joint venture to invest in the logistics industry in Japan. CIC and GLP, Asia’s largest industrial and logistics infrastructure provider, will each hold 50% in the total investment of USD1.6 billion. The joint venture will acquire 15 modern logistic facilities in Japan belonging to LaSalle Investment Management, a unit of the world’s second-largest commercial real estate broker, said GLP, who will act as the asset manager of the acquired properties. The acquisitions may be done in the first quarter of 2012. The 15 properties to be acquired cover 770,989 square meters, with over 90% in the Tokyo and Osaka areas. The properties enjoy an occupancy rate of 98.3%. “The properties to be acquired come with a strong tenant profile ― 67% of the space is utilized by large third-party logistics service providers and 13% is leased by e-commerce companies,” said Ming Z Mei, CEO of GLP. He said GLP’s Japan portfolio will grow 30% to 3.6 million sq m after the acquisitions.