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March 2010 Nanjing Customs announced on 9 March that its operations at the city’s international airport will start by October 2010. The building project has taken more than five years to complete and is expected to have a positive impact on the neighbouring region.
China plans to buy 218 aircraft this year, including jumbo jets and regional planes, to meet surging demand, said Li Jiaxiang, director of the Civil Aviation Administration of China.
A total of 700m passenger trips a year are expected to be made by 2020, and that number is likely to double by 2030. Last year, there were 230m passenger trips in China, and cargo freight volume stood at 4.46m tonnes, Xinhua reported. This year both amounts are estimated to grow by 12 per cent, Mr Li said.
China built and upgraded 22 airports in 2009 and Rmb90bn will be invested in 25 airport expansion projects this year.
Air China Cargo, China’s largest cargo airline, launched a service between Shanghai and Paris on 6 March, its fourth service between China and Europe. The new service operates via Beijing and Copenhagen every Thursday and Saturday.
Air China Cargo’s flights to Europe also serve the cities of Frankfurt, Vienna, Milan and Manchester.
From 8 March, China Eastern Airlines started operating direct cargo flights between Taipei and Changbei International Airport in Nanchang, capital of Jiangxi province.
The flights depart and return every Monday, carrying up to 4 tons of cargo and 158 passengers for a single trip.
A cargo transportation fee of Rmb5 per kilogram has been set, Rmb9 less than the indirect flight fee.
Taiwan fruits are especially popular in Jiangxi but many people cannot afford them because of their high prices. Demand is now likely to increase because of reduced transport costs, said a Nanchang Customs official.
From 20 March, China Eastern will also start to operate a direct flight from Nanjing, capital of Jiangsu province, to Singapore. Services will operate every Monday, Thursday and Saturday.
Plans to build an efficient rail network linking China to six Southeast Asian countries are advancing as important gaps are filled in Cambodia, reported the Financial Times.
The Asian Development Bank recently agreed to extend a second US$42m loan for the US$141m reconstruction of Cambodia’s rail network. Funds are also being supplied by Australia and Malaysia. More than 650km of track is to be renovated, including a 48km section running west to Thailand that will then connect Cambodia to Malaysia and Singapore. The project is due to be finished by 2013.
The next project will be to bridge the gap between the Cambodia-Singapore and Vietnam-China lines.
The network is expected to strengthen economic ties by reducing transport costs and making travel more convenient. A new trade agreement came into effect in January that has cut tariffs on most goods exported between China and members of the Association of South East Asian Nations.
Ten per cent of the 13.6m new vehicles sold in China last year were recalled because of faults, according to the General Administration of Quality Supervision, Inspection and Quarantine.
Chinese cars were the subject of 29 recalls, involving 1.28m cars, reported China Economic Review, while foreign brands were recalled 28 times, involving 81,400 cars.
The number of recalls in 2009 was 150 per cent more than in 2009. The administration said it proved that people are paying more attention to product quality.
The only brands not to get recalled because of a fault were Geely, Brilliance Jinbei and Renault Trucks.
China’s highway mileage will surpass that of the US in three years following completion of the ongoing infrastructure construction programme, said Li Shenglin, Minister of Transport. By the end of 2009, China had 65,000km of highways, behind only the US, which has more than 80,000km.
However, Mr Li acknowledged that China still lags behind the US in terms of road quality, management and network construction standards.
China’s fixed-asset investment on transportation development exceeded Rmb1,130bn in 2009, which contributed 0.5 percentage points to GDP growth, Mr Li added.
TNT Hoau, TNT’s road distribution subsidiary in China, has completed its nationwide day-definite road distribution network, having extended the coverage into Chengdu, Chongqing, Zhengzhou, Xian, Yantai and Xiamen. TNT Hoau now offers guaranteed day-definite ground delivery to 26 Chinese cities using a network of 800 depots across the country.
A shipment from Guangzhou to Shanghai, for example, will take a little less than two days to be delivered. Shipments are bar-coded and container trucks are tracked by GPS.
In addition to extending coverage, TNT Hoau has also completed the purchase of 400 EU III-compliant trucks.
The drought that has struck five provinces in southwest China has worsened, leaving at least 11m people short of water and affecting large areas of farmland, the authorities have warned.
The Office of State Flood Control and Drought Relief said the supply of drinking water would be the highest priority for drought relief efforts in Yunnan, Guizhou, Guangxi, Chongqing and Sichuan, as the drought is expected to last until mid-March.
High temperatures and a lack of rain have caused some reservoirs to dry up. For example, Lijiagou reservoir in Chongqing’s Rongchang county has run dry and cannot supply water for the 20,000 residents in the area, local media reported. As a consequence, the local government has had to arrange for water to be transported from the Laixihe River.
Tianjin Port Group, the largest port operator in north China, expects to handle 400m tons of cargo and 10m TEU in 2010. Its cargo throughput last year was 380m tons.
The group will invest US$1.9bn on infrastructure at the port this year, and will start construction on several projects, including a second 300,000-ton crude oil wharf and an ore wharf.
Another major port in northern China, Qingdao, said it expects a steady rebound in volume in the first half of 2010. Its cargo throughout was up 9 per cent year-on-year in January and February, while container throughout increased by 6 per cent. Qingdao is China’s largest iron ore and crude oil port.
The head of the French Development Agency has told Wuhan’s Communist Party Secretary and Deputy Provincial Party Secretary Mr Yang Song that the French government wishes to widen the scope of bilateral co-operation to promote low-carbon emissions, sustainability of urban development, agriculture, industries and services. France will provide government loans or funds for projects in these areas. At the moment, according to a local newspaper report on 10 March, the agency is talking with government departments about the renovation of public buildings to reduce energy consumption levels.
France is the first and, until recently, the only country to have established a consulate in Wuhan. Recently, the US set up a one-person consulate in the city.
China’s new 10-year development plan for the interior will shift focus from driving economic growth to developing six major industries most suitable to the region, according Mr Wang Jinxiang, former deputy director of the State Commission for Reform and Development. The six industries are energy and chemicals, mining and processing, capital equipment, high technology, agricultural and husbandry produce, and processing and tourism.
The plan, still being fine-tuned by the commission, has already gone through several drafts, Mr Wang said. The central government will continue to focus its investment in infrastructure and environmental protection, with additional tax incentives.
Mr Wang said that the first 10 years of the government’s Go West campaign had facilitated an average annual GDP growth rate of 11 per cent in the interior provinces.
The Panama-registered bulk carrier Farvang suffered a sudden engine failure on 9 March when passing through a treacherous stretch of the Zhangjiagang section of the Yangtze River. The empty vessel narrowly missed hitting the quayside in gale-force conditions, according to local maritime safety authorities.
The pilot on board reported a loss of control and the vessel was able to anchor as advised. That particularly stretch of river is narrow and contains many bends.
The carrier is 152.6 metres long and 24 metres wide, with a draught of 5.5 metres.
An investigation is under way looking into the cause of the engine failure.
The 12-year, Rmb15bn dredging project of the Yangtze River mouth is due to be completed in the middle of this month. The project covers a 92.2km-long, 300-metre-wide shipping channel starting at Waigaoqiao, in Shanghai, and finishing where the Yangtze enters the East China Sea.
The programme began in 1998 and has increased the depth of the estuary shipping channel from 7 meters to 12.5 meters.
As a result of the dredging programme, the channel at the estuary will be able to accommodate, at any time, container vessels each of 2,000 to 4,000 TEU capacity and 50,000-dwt cargo ships. At high tide, it will be capable of accommodating 6,000 to 11,000 TEU container ships and 100,000-dwt vessels.
Chongqing will invest another Rmb20bn in the construction of Jiangbei International Airport’s east terminal area. The design plan for Terminal 3a, the most important element of the project, was recently approved at an executive meeting of Chongqing municipal government.
The airport will be capable of handling 70m passengers when the east project is completed, with around 55m being handled by the east terminal area and 15m by the west.
The first phase of the east terminal area project, including Terminal 3a, the third runway and supporting facilities, will go into construction in the first half of 2011 and will be completed in2015. Second phase construction, comprising Terminal 3b, the fourth runway and supporting facilities, will start around 2020.
Air China will terminate its services between Chongqing and Central Japan International Airport (Centrair) from 28 March, according to Kyodo News. On the same day, the carrier will launch a new route from Chengdu to Centrair, which is located near the city of Nagoya.
The Chengdu route will be operated daily, with a stopover in Shanghai. Air China hopes that it will attract more business travellers and tourists.
In a separate development, Air China said it would add three flights a week from Beijing to Vancouver, boosting the total number of non-stop flights from China to Canada to 10 a week. The additional flights will begin in June.
Beijing-Shanghai High-Speed Railway Co is planning to raise Rmb30bn-50bn through an initial public offering this year, a source with the Ministry of Railways told China Daily.
The plan has yet to be approved by the State Council as the line is still under construction and the railway operator does not have the regulatory requirement of a three-year profit record, said the source.
China Railway Investment Corp (CRIC), owned by the Ministry of Railways, is the largest shareholder in the company, which was set up in 2007. CRIC holds a 56.2 per cent stake in the project and it said it intends to sell a 4.5 per cent stake to raise about Rmb6bn for other construction projects.
Ping An Asset Management and the National Council for the Social Security Fund are the second and third largest shareholders in the company.
Railway projects in China are largely financed through national funds and railway construction bonds issued by the Ministry of Railways. However, the ministry is now exploring different ways to raise capital.
Services on the Wuhan-to-Guangzhou high-speed railway were 98 per cent full in the first 26 days of the 40-day Spring Festival, reported China Economic Review. Some 1.1m passengers were carried on the trains since the start of the travel season on 30 January.
The railway, which costs Rmb116.6bn to build, allows trains to travel at an average speed of 350 kph. The journey has been reduced from at least 11 hours to just three hours now.
According to the Zhengzhou Railway Bureau, another high-speed railway from the central city of Zhengzhou to Xian in northwestern Shaanxi province has also been operating nearly full trains. Some 2.32m passengers have travelled on services since the line opened on 26 December last year.
Shanghai Shipping Exchange plans to establish a container shipping derivates market by the end of 2010 as the city strives to challenge London as a global centre for shipping finance.
The forward freight agreements will be targeted at small and medium-sized shippers whose volumes are not large enough to warrant long-term shipping contracts, said Yao Weifu, a director at the shipping exchange. The plan is awaiting government approval.
Last year, the Shanghai Containerised Freight Index was launched to act as a benchmark for container shipping futures. The weekly index tracks spot rates for shipments on 15 routes, including ones to Europe, the Mediterranean and the US. The data, compiled from 15 shipping lines and 15 freight forwarders, reflects more than 60 per cent of global container shipping, according to Yao.
The Port of Shanghai, the world’s second largest container port after Singapore, recorded a throughput increase of 18 per cent year-on-year to 2.24m TEU in January, reported Xinhua.
The port’s performance began to improve in the second half of 2009 when foreign trade started to pick up. Shanghai handled 2.39m TEU in December 2009, its first monthly increase of the entire year.
China Shipping Development, the dry bulk and tanker arm of China Shipping (Group), and Shenergy, the Shanghai-based energy company, have launched a joint venture shipping company for transporting coal, Shanghai Daily reported.
The two companies will jointly invest Rmb240m in the venture, with China Shipping taking a 51 per cent stake.
The new company is expected to have a capacity of 100,000 dwt by the end of 2010 and to further expand in future. Within four years, it is expected to meet up to 80 per cent of the transport requirements of Shenergy’s power plants.
The privately-owned Chinese bunker supplier Shanghai Lonyer Petrochemicals has acquired Hailian Tank Farm in Zhoushan, Zhejiang province, according to various reports. The 80,000-cubic metre Hailian Tank Farm, mainly used to store fuel oil, is supported by a 5,000-dwt oil jetty.
The company has also purchased two 1,000-tonne barges for bunkering in the area.
Shanghai Lonyer has for some time been leasing storage space from the terminal to operate its wholesale bunker fuel oil and shale oil business.
The company has branches in more than seven cities, including Nantong and Shanghai. It sells about 1m tonnes of oil a year.
Chongqing Traffic and Tourism Investment Group said it has started building the first of 10 luxury inland cruise ships in a project that will cost Rmb2bn. Each vessel will be twice as expensive as the most luxurious cruise ships currently sailing on the Yangtze River, and considerably bigger.
Gong Li, a manager of the group, said that the Yangtze should become the most luxurious inland tourist line.
Chongqing Evening News reported that the first ship would be deployed in May 2011. It will be 136 metres long, 19.6 metres wide and will have six floors.
In addition to the Three Gorges cruise tour, a new service will be launched from Chongqing to Shanghai once the new vessels are operational.
The port of Nantong, situated near the mouth of the Yangtze, posted a throughput of 33,000 TEU in January 2010, 46 per cent higher than in the same month last year. This rate of increase was the fastest recorded by the port in nearly two years, Xinhua reported.
General cargo throughput tonnage at the Jiangsu port increased 24 per cent to 11.8m tonnes.
For the whole of 2010, Nantong is targeting an annual cargo tonnage of 140m tonnes and a container throughput of 450,000 TEU.
Hubei members of the National Congress are to submit a motion calling for the central government to raise the guaranteed water level between Yichang and Chenglingji in a bid to facilitate better utilisation of the river for industries in the region. At the moment, the guaranteed water level in this section is 3 metres, compared with 4.5 metres upstream of this section and 4.5 metres likely to be achieved downstream by the end of 2010.
One-third of the navigable Yangtze, or 1,060km, runs through Hubei province. Industries situated along the river contribute two-thirds of the province’s GDP, according to the motion.
The Wuhan-based Yangtze River Administration, representing the central government, is responsible for maintaining a certain water level at different sections of the river, otherwise known as the guaranteed water level.
The Yangtze Maritime Safety Authority has issued warnings of severe drought in the Chongqing area of the Yangtze. It says that the water level in Chongqing’s Yangjiaotan section fell by 8.32 metres since 1 January to 161.1 metres on 1 March. It now stands nearly five metres lower than at the same time last year.
This fall in water level has been caused by the continued drought in southwestern China, exacerbated by the water-releasing cycle of the Three Gorges Dam that began in February to alleviate the water shortage in the middle reaches immediately downstream of the dam. Consequently, maritime officials warn that the width of the shipping channel has narrowed and that currents are faster than before, creating new hazards for passing vessels.
The Yangtze MSA has initiated a number of measures to combat the impact of the dry season, which it believes has arrived one month earlier this year than normal. Measures include texting messages about changing water levels, creating new lightening bases and co-ordinating with all the maritime safety authorities along the upper reaches.
The Yangtze MSA also says that the water level is continuing to fall and that vessels must limit their draught to 2.4 metres, except those carrying dangerous goods that require a draught of no more than 2.3 metres.
The Yangtze River Administration under the Ministry of Transport has just completed a survey which, for the first time ever, identifies all the expansion and renovation projects across the 2,838km navigable length of the river. These projects, under construction, planned and likely to be approved, involve investments of Rmb27bn, equivalent to US$4bn.
Out of the 73 ports that responded to the survey, 46 submitted details of their projects, including the size, current status and purchasing list of required handling equipment and technology. Shopping list items include handling equipment for bulk, breakbulk, containers, ro-ro and oversize cargo, as well as operations management software, vessel-to-shore communications systems and other technology.
The administration is currently working with Yangtze Business Services to organise a summit on 25 May in Wuhan that will bring together Western suppliers and the Yangtze ports. A large number of participating ports have also expressed interest in joining an overseas fact-finding and procurement trip later in the year.
All Yangtze ports have been encouraged to upgrade their handling equipment and technology as part of a central government-driven programme to modernise the Yangtze by 2020. Tax rebates are being made available to Yangtze ports, among other incentives. The Yangtze ports are also one of the major beneficiaries of the government’s Rmb4,000bn stimulus package announced in November 2008.
Further information can be obtained by contacting us via email: info@YangtzeBusinessServices.com.
February 2010 Shangri-La Hotels and Resorts has signed an agreement with Chongqing Guest House to manage a hotel in Chongqing that is scheduled to open in late 2011. The 469-room hotel will occupy the first 28 floors of a new 58-storey building, a multi-purpose complex incorporating office space and retail outlets.
The hotel will be located in the central business district, 45 minutes from the airport and an eight-minute walk from the commercial centre of Yuzhong district.
The International Olympic Committee has elected Nanjing as the host city of the Second Summer Youth Olympic Games in 2014. The city received 47 votes, ahead of the only other contender Poznan in Poland, which received 42 votes.
Some 3,600 athletes ranging in age from 15 to 18 are expected to compete at the Nanjing Games in 2014, which will feature competitions in 26 sports. The award will give the city tremendous momentum to speed up its investment in infrastructure and raise its profile on the international stage, said Mr Zhu Shanlu, the city’s Communist Party Secretary.
The inaugural Youth Olympic Games will be held in Singapore between 14 and 26 August 2010.
The Yangtze River Delta city of Wuxi intends to transform itself from a manufacturing hub to a hi-tech centre by expanding cooperation with domestic and foreign businesses, according to China Daily.
Already one of the country’s top 10 cities in terms of GDP, Wuxi signed a dozen new projects last month, including ones in electronic information, bio pharmaceutics, outsourcing, and new energy and materials.
The city in Jiangsu province has also secured an agreement with consumer electronics maker Beijing Huaqi Information Digital Technology to invest Rmb30m in a hi-tech manufacturing base. Beijing Huaqi, maker of Aigo branded electronics, plans to locate its MP6 wireless technology unit in Wuxi.
In 2009, Wuxi formed new alliances with telecom carriers China Mobile, China Unicom and China Telecom, to cooperate in research and development, project incubation and other areas. In addition, one Wuxi company has reportedly signed an MOU with France’s Accor Services to set up a joint venture in the city focused on its prepaid services business, which provide employee benefits and outsourcing services.
Wuxi government believes that service outsourcing could employ more than 1m people by 2020, and as a consequence it has launched a number of measures to develop its talent pool.
Sinopec plans to build electric vehicle charging facilities in its large petrol stations in some regions, including Beijing and Chongqing. On 22 February, a Beijing subsidiary of Sinopec teamed up with Beijing Capital Science and Technology Group Corp to set up a clean-energy joint venture to build charging stations for electric vehicles.
State Grid Corp of China has already built several charging stations in Shanghai, Tianjin and Xian. By the end of this year, it plans to add 75 stations and 6,029 charging facilities in 27 Chinese cities.
Chongqing Shipping Construction and Development Corporation, the operational arm of the municipal government’s transport commission, signed an agreement with the local government of Fuling on 8 February to build the largest logistics park in the upper reaches of the Yangtze.
Known as Longtou (Dragon Head) Port Logistics Park, the project will take five years to complete and will involve a total investment of Rmb4bn.
By 22 February, an estimated 1.34bn people had travelled on China’s roads since the start of the Spring Festival holidays, up 8.3 per cent from the equivalent period last year, according to the Ministry of Transport.
Snowstorms in eastern China closed a number of highways during the holiday period, with major cities such as Beijing, Shanghai and Nanjing all affected. However there was no repeat of the chaos experienced in 2008 when the extreme cold weather crippled transport systems and stranded millions at the start of the holiday rush.
The rail network has also been busy. An estimated 600,000 passengers entered railway stations in Guangdong on 21 February. Most of the passengers were returning from holiday or migrant workers seeking employment in the province, said Huang Xin, spokesman for Guangzhou Railway Group. About half of them were transported by the 138 trains added during the Spring Festival holiday, he said. The second peak of inbound passengers is expected to occur between 1 and 3 March, when students and more migrant workers return.
China’s civil aviation industry recorded a 19.4 per cent year-on-year increase in passenger numbers to 4.78m between 13 and 19 February, according to statistics released by the Civil Aviation Administration of China. Chinese airlines arranged 37,027 flights during the holiday, 14.7 per cent more than in the same period last year.
An increasing number of Chinese are travelling abroad during the holiday period. The number of cross-border entries and exits by mainlanders between 13 and 19 February grew by 20.8 per cent on the equivalent period in 2009 to almost 2.4m, said the Ministry of Public Security. According to the China Youth Travel Service, popular destinations included Southeast Asia, Australia and Taiwan.
Air China and Cathay Pacific Airways will sign an air cargo venture agreement by 26 February, said a China Daily report citing three people familiar with the negotiations in Beijing. According to these contacts, Air China will inject seven freighters into the venture, while Cathay will put in five or six planes.
The carriers plan to form the Shanghai-based venture as Chinese exports to the US and European markets are starting to rebound. Shanghai is China’s most important cargo centre, said Jack Xu, an analyst at Sinopac Securities in Shanghai, and the move should help the partners challenge China Eastern, which last month acquired Shanghai Air.
Shanghai Pudong International Airport currently accounts for more than 60 per cent of China’s international air cargo, of which more than 70 per cent is handled by overseas carriers.
Talks between the two airlines started in 2006, when it was announced that Beijing-based Air China would own 51 per cent of the new cargo venture, with Cathay owning the remaining 49 per cent.
In the first half of 2009, Cathay Pacific Cargo suffered a 20 per cent fall in tonnage at Hong Kong International Airport, although demand picked up in the second half of the year. The improvement has been carried over into 2010. Last month, Cathay and its sister carrier Dragonair carried a total of 144,000 tonnes of cargo and mail, up 25 per cent on the same month in 2009.
Air China is Cathay’s second-largest shareholder with a 30 per cent stake. Cathay Pacific owns 18 percent of Air China, the nation’s largest international carrier.
Panalpina, the Switzerland-based supplier of forwarding and logistics services, has introduced a new LCL (less than container load) ocean freight service between China and Poland. The service, between Ningbo and Wroclaw in Poland, involves a transit time of 26 days. It complements an existing direct LCL service between Shanghai and Wroclaw.
Panalpina is looking at additional services from the Asia-Pacific region to Wroclaw as it expects considerable economic growth in Poland, especially in the hi-tech sector.
A new shipping line formed only last year, The Containership Company, is set to start services from China to Europe and the US in the next few months once fundraising is completed, reported Seatrade. The Copenhagen-based company will charter six to eight small container vessels for a China- US west coast service and up to a further 10 ships for a China- Europe service. The services will be based out of the Yangtze River Delta port of Taicang and offer direct port-to-port calls only, with no additional door-to-door logistics services offered by most major lines.
A volume of more than 600,000 tons of coal passes the Jiangsu section of the Yangtze every day, according to Jiangsu Maritime Safety Authorities. From 10 January, local maritime officials started a Green Channel for Coal and Oil, a procedure designed to speed up anchorage applications, the co-ordination of vessels entering and departing ports, and loading and unloading operations. The measure was taken to ensure that all the major coal-fired power plants along the Yangtze had enough stocks leading up to the Chinese New Year.
In another recent development, the largest ever coal-carrying vessel to enter the Yangtze anchored at the terminal of Taicang Power Plant. It was carrying 56,000 tons of coal. It is not clear where the coal came from.
According to China Daily, China’s coal imports more than tripled in 2009 to 130m tons. The increase was attributed to the economic stimulus package which pushed up demand for high quality coking coal used in the steel, cement and chemical industries.
Shipping in the Zhangjiagang section of the Yangtze River has returned to normal following the sinking of an ocean vessel that collided with another vessel on the evening of 8 February.
As a result of the sinking, a temporary shipping lane about 160-180 metres wide was created. On 21 February, a salvage team managed to move the sunken vessel northwards, away from the main shipping channel. After some monitoring, the waterway authorities declared the area safe.
At 12:20pm on 21 February, the Hong Kong-registered oil tanker Beech Galaxy was the first vessel to pass through the main channel since the collision.
China’s iron ore imports slipped to 46.62m tonnes in January after reaching 62.16m tonnes in the previous month, the second-highest monthly volume ever, the General Administration of Customs said.
January’s imports of steel products decreased to 1.35m tonnes, while exports fell to 2.89m tonnes.
The Panama-registered vessel NYK Springtide sailed safely into the waters of Jiangyin port under the supervision of the local maritime safety authorities on 23 February, its destination being the local scrap yard. About 253 metres long and 32 metres wide, this was the 10th such vessel to arrive at the port since the start of the year, according to China News Services. In 2009, as many as 123 vessels arrived in Jiangyin for scrap, making the Jiangsu city Asia’s largest base for scrap vessels. Chongqing’s economic growth rate of 14.9 per cent in 2009 was the third highest in China, according to the National Bureau of Statistics.
Shipbuilding is one of many industries in the city to have performed well over the past year, despite a worldwide downturn in the sector. The gross output of Chongqing’s ship industry reached Rmb15.67bn in 2009, up 55 per cent compared with 2008, according to municipal government figures. A surge in domestic orders more than compensated for a sharp fall in international business.
Ford’s joint venture with Chongqing Changan Automobile sold 30,759 passenger cars in January, an increase of 128 per cent from a year ago. The US company attributed the sales surge to the increasing popularity of its new Fiesta and Focus models.
Another Chongqing company enjoying prosperous times is Chongqing Longxin Engine, which last year topped a list of motorcycle firms ranked by export value. Its 2009 exports were valued at US$265m, according to a report released by China Association of Automobile Manufacturers. During the year it exported 630,090 motorcycles, more than any other Chinese manufacturer.
Chongqing Yinxiang Motorcycle (Group) was in fifth place with exports of US$159m.
Hubei Electric Power has signed cooperation agreements with the governments of Xiangfan and Suizhou in Hubei province to construct electric-vehicle charging facilities.
This is part of a plan that will involve 16 large and medium-sized electric-vehicle charging stations built in the province in 2010, along with 300 charging poles. The province will invest Rmb127 in the project.
Over the next five years, Hubei will build at least one charging station in each county and key town.
Across the world, electric cars are generally used over short distances between work and home. In addition to reducing greenhouse gas emissions, they also help reduce noise pollution.
Malaysia Airlines Cargo plans to improve connections to Shanghai and other cities in China following the signing of a deal last October with Hainan Airlines Group. “We are working closely and hope to start a major initiative with [Hainan] by May 2010,” said managing director, Shahari Sulaiman.
The company aims to grow 10-15 per cent in 2010 by expanding its network through alliances and increasing its capacity.
Mainland Chinese airports handled 9.46m tonnes of cargo in 2009, an increase of 7 per cent over the previous year, said the Civil Aviation Administration of China.
UPS launched its new Asia-Pacific hub on 9 February with its inaugural flight at Shenzhen’s Baoan International Airport. The Shenzhen hub replaces operations at the former Clark Air Force Base in the Philippines.
The new facility cost an estimated US$180m to build and its 400 staff will be capable of sorting 18,000 packages an hour, according to the US-based company. It will provide overnight delivery services between Asia-Pacific countries.
UPS reported a 10 per cent growth in Asia-Pacific export volume in the fourth quarter of 2009 compared with the same period in 2008. China-to-Europe volume grew by more than 15 per cent, while intra-Asia volumes increased by more than 5 per cent.
International express delivery companies have invested heavily in China in recent years. One year ago, FedEx opened a US$150m Asia-Pacific hub in Guangzhou’s Baiyun International Airport. Its main Asian hub was also previously based in the Philippines. In December 2008, UPS opened an international air hub in Shanghai at a cost of US$125m. DHL has also announced plans to spend US$175m on its north Asia hub in Shanghai, due to be completed in the second half of 2010.
More than 10,000 passengers were delayed for at least two hours at Guangzhou south railway station on 6 February because of an equipment error on the high-speed train between Guangzhou and Wuhan.
The error, which happened in Shaoguan, Guangdong province, caused the third delay to the service since operations began in late December.
Police officers were sent to the station to help maintain order as passengers had to contend with inadequate toilet facilities and long queues for refreshments.
The 1,069km Wuhan-Guangzhou railway, China’s first long-distance high-speed line, is expected to carry more than 1.6m passengers during the 40-day Spring Festival season, with 33 pairs of trains operating each day.
The Ministry of Transport said that 609m journeys had been made by bus or railway between the start of the Spring Festival on 30 January and 8 February, up 8.5 per cent from the equivalent period in 2009. A total of 63.3m journeys were made by bus or railway on 8 February despite weather disruptions in some regions. Snow and heavy fog hit northern China over the weekend of 6-7 February, closing expressways and delaying flights.
A total of 2.54bn journeys are expected to be made during the 40-day mass passenger transportation period. In January, the Ministry of Railways forecast that China’s railways expect to transport 210m passengers over the Chinese New Year, up 9.5 per cent year-on-year.
A surge in export orders in the lead up to the Chinese New Year has strained capacity at Shanghai port, reported China Daily.
Outgoing vessels heading for Europe and America have been over-booked since last December, according to Michelle Wang, a local manager at UniLogistics, a privately owned Chinese freight forwarding company. She said the shipping price for container vessels has risen, on average, three times a week since January.
The China Containerised Freight Index rose 7.7 per cent in a month to stand at 1,081.67 points on 5 February, reflecting the upturn in international seaborne trade, particularly to the American east coast.
Another factor that has contributed to the shortage of capacity was the reduction in container services last year in response to the global economic downturn. A spokeswoman at Shanghai Quanmei Logistics said that the outbound container price per TEU had doubled in a month since the end of December.
Agriculture is the main cause of water pollution in China, according to the country’s first national census of pollution sources. The discharge of Chemical Oxygen Demand (COD), a major water pollution indicator, totalled about 30m tonnes in 2007, 43 per cent of which came from agricultural sources, according to the census.
Zhang Lijun, vice minister of environmental protection, was reported by Xinhua as saying that controlling pollution from agriculture is essential to solving the water pollution problem. Livestock and poultry are the main sources of agricultural pollution, said Wang Yanliang from the Ministry of Agriculture. He went on to say that the ministry would work to help more livestock and poultry-breeding farms develop methane digesters. Measures will also be taken to limit rural waste discharge and improve the efficiency of agriculture chemicals.
Industrial pollutant discharges are mainly concentrated in a small number of industries and areas that have particular structural problems.
This census is the first significant survey on national pollution. Environmental experts have said that reliable statistics on the sources and extent of pollution are essential in order to tackle the problem.
The final round of competition for hosting the 2014 Youth Olympic Games will be held in Vancouver, Canada, on 11 February and the winner will be announced at the end of the day. Nanjing is one of just two finalists, the other being Poznan in Poland. Earlier, Mexico’s Guadalajara withdrew from the competition.
The first Youth Olympics will be held in Singapore this August.
Nanjing Port Group, the largest port operator in the capital city of Jiangsu province, says that it aims to handle 74m tons of general cargo and 1.32m TEU in 2010.
Nanjing is among the 10 largest ports in China and is a regional hub on the Yangtze.
The leading committee of Wuhan New Port agreed on a set of 2010 targets at a meeting on 6 February. The targets include a 15.5 per cent year-on-year increase to 100m tons of general cargo throughput and a 25 per cent increase to 710,000 TEU in container throughput.
A total of Rmb12bn of government money will be invested in 80 projects, nearly double that of last year. The target also envisages attracting inward investment of more than Rmb20bn.
Wuhan New Port is a provincial government-driven project to develop Wuhan and the neighbouring cluster of ports in an effort to accommodate and serve the rapid pace of industrialisation in the region. On 3 February, four building projects − a bulk terminal in Wuxue port, a multi-purpose terminal in Huangzhou port, a steel-handling terminal and another cement-handling terminal in Huangshi port − started construction at the same time. Between them, they will have an annual handling capacity of 15m tons and involve a total investment of Rmb392m.
Chongqing can expect to receive US$6bn of foreign investment in 2010, according to municipal mayor Huang Qifan. About one-third of the foreign capital will be invested in industry, with equal proportions going to real estate and urban infrastructure, and finance, business and tourism.
One of the largest investments in Chongqing in recent times, Hewlett-Packard’s PC manufacturing facility, was formally put into production on 26 January.
From 1 February, travellers in Wuhan have been able to pay for buses, ferries and light rail trains using an E-card, a keychain-shaped integrated circuit card. This new payment system introduced by the Wuhan government is designed to encourage more residents to use public transport.
The standard fare for a cardholder on ordinary buses will drop from Rmb0.9 to Rmb0.8, on double-decker buses from Rmb1.4 to Rmb1.3, and on air-conditioned buses from Rmb1.8 to Rmb1.6. For those passengers without an E-card, the standard bus fare remains unchanged.
A subsidiary of Grand Power Logistics Group, a China-based international logistics provider, has signed an MOU to develop Yangshan International Container Transit Logistics Park, reported China Economic Review.
The park will be located at the north end of the Shanghai terminal and will cover 867,700 sq metres of reclaimed land. It will facilitate the transhipment of containers passing through Yangshan deepwater terminal. The estimated investment required to develop the park is expected to total US$485m.
Transport Intelligence said that the final terms of the land purchase for the development would be agreed by October 2010.
China’s only bullet train producer is to expand production capacity to cope with the country’s increasing number of high-speed railways, reported Xinhua.
Wang Chenghui, deputy general manager of Tangshan Railway Vehicle, said the company would double its monthly production capacity in the first half of 2010 to eight bullet trains, each with eight compartments.
The company makes trains with a maximum test speed of 394kph. It has produced 22 trains to serve the Wuhan-Guangzhou high-speed line, which began operation in December last year. Another 20 trains are running on the Beijing-Tianjin line, which became China’s first high-speed line in August 2008.
A funding shortage could hinder China’s ambition of creating a modern railway network, according to an article in South China Morning Post. Some difficulties were experienced last year as funds from the Rmb4,000bn stimulus package dried up and they may continue to impact high-speed rail projects in 2010. The report said that a high-speed network can cost up to three times as much to build as a regular railway network.
In September 2009, the Ministry of Railways announced it would build 42 high-speed passenger rail lines over the following three years, with a total length of 13,000km.
Operators also face the problem of ticket pricing, as many potential passengers can’t afford to travel on high-speed trains. “If the price is too high, nobody will take them. If the price is too low, there will be financing difficulties,” said Geoffrey Cheng, director of Asian equity research at Daiwa Securities.
Track laying started on 1 February on the 300km Shanghai-Nanjing intercity rail line, construction of which started in July 2008. Many workers on the line will have to continue their work throughout the Chinese Spring Festival holiday (14-21 February) in order to make sure that track laying is completed by 28 February.
According to the schedule, the intercity line will start operations on 1 July, during the Shanghai Expo. The line, running almost parallel to the existing Shanghai-Nanjing railway line to the north, will pass through Suzhou, Wuxi, Changzhou, Zhenjiang and Nanjing. It is jointly financed by the Ministry of Railways and local governments in Shanghai and Jiangsu province.
In another project, this one timed to be operational at the start of the Expo on 1 May, Shanghai’s No.2 metro line will be extended at both ends to connect the two airports in Pudong and Hongqiao.
A formal ceremony was held on 31 January to signal the start of second phase construction of Nanjing airport, according to China News Service. The Rmb9.9bn project will involve the construction of a second runway, 3,600 metres long and 60 metres wide, and a 200,000 sq metre second passenger terminal and 42 landing berths.
Last year, more than 10m passengers passed through Nanjing airport. By 2020, the airport is expected to handle 30m passengers and 800,000 tons of cargo.
China’s aviation authorities have set up a task force to sort out the problems resulting from flight delays by end of the year, according to the Aviation Newspaper. From 10 February, they will concentrate efforts on Beijing, Shanghai and Guangzhou to set up decision-making procedures and emergency response mechanisms in an effort to reduce the number of delayed flights and improve passenger care at times when severe weather conditions or other factors make delays inevitable. They will also aim to establish ways to collect accurate flight data and track punctuality.
At the moment, flight delays in the four airports in these cities have ripple effects across other parts of the country. Passengers are frequently ill-informed if stranded.
Hong Kong-based transport consultancy Transport Trackers says there has been a scramble to ship cargo out of China in the lead up to the Spring Festival. There has been a big increase in Asia/China outbound trade growth since the end of December, and in recent weeks conditions have approached pandemonium for exporters trying to get cargo out before the holidays begin.
Cargo owners have been forced to pay whatever rates are being asked. Transport Trackers quoted the example of the customer of a forwarder who balked at paying US$2,700 per FEU from Shanghai to the US west coast, while half that rate was more common a few months ago.
Shanghai increased its lead as the world’s largest general cargo port in 2009, with volumes up 1.3 per cent to 590m tons, according to the National Development and Reform Commission. Singapore, in second place, experienced an overall volume decline of 8.5 per cent to 471.5m tons, according to its own figures.
Shanghai was still behind Singapore in terms of container traffic, with a 10 per cent fall in 2009 throughput to 25m teu. Container traffic in Singapore last year fell 13.5 per cent to 25.9m teu.
Twenty Chinese ports each recorded a cargo throughput of more than 100m dwt in 2009, according to the Ministry of Transport. Four new ports joined the list last year: Jiangyin in Jiangsu province, Xiamen in Fujian province, Zhanjiang in Guangdong province and Huzhou in Zhejiang province. Jiangyin, on the Yangtze River, and Huzhou, on the Grand Canal, are both inland waterway ports.
Statistics from the Yangtze River Administration under the Ministry of Transport show that cargo throughput via the major ports on the Yangtze trunk line rose 33 per cent year-on-year to 98m tons in January. In the same period, foreign trade-related throughput rose by 22 per cent to 11.5m tonsm while and container throughput reached 550,000 TEU, up 25 per cent.
March 2009 A dozen people died in a chemical storage facility collapse in Chongqing municipality. The accident occurred at a Jianfeng Chemical building which was under construction when the ceiling collapsed, said Tang Zongwei, government head of Fuling district.
The company, under Chongqing Chemical and Pharmaceutical Molding (Group) Co, mainly produces fertilisers. The ceiling was 30 metres in diameter and more than 10 metres high.
Shanghai’s waterway authority took urgent measures to move a fleet of cargo ships clogging up a 3.7km-long section of Suzhou Creek. About 400 cargo ships have been unable to move for four days, according to the 20 March edition of Oriental Morning Post. Four patrol ships and nearly 50 officials were dispatched to get shipping flowing again and temporary berths were established.
Officials said continuous rain since late February in the Yangtze River Delta area had caused the jam. They said rising river levels had forced nearby cities to shut water gates and keep shipping out. The rain has also slowed down loading and unloading at ports along the creek.
Most of the ships involved transport stones and gravel for Shanghai’s construction projects.
The Qingshan shipyard of China Changjiang Shipbuilding Industry in Wuhan has officially delivered its first 57,000 dwt bulk ship. The vessel, which will be exported to Greece later in March, is the largest ship ever built in central China.
The ship, designed by Shanghai Ship Research & Design Institute, is nearly 190 meters in length, 32 metres wide and 18 metres deep. Ships of this size would have been impossible to build in Wuhan until very recently as the draught of the Yangtze was insufficient. A huge dredging effort in different stretches of the river is changing the face of Yangtze traffic. Wuhan is located some 1,100km along the river from the mouth near Shanghai.
BASF, the world’s largest chemical producer, has halted construction at two facilities in China due to slumping demand as a result of the global economic downturn, chairman Jurgen Hambrecht told Caijing. The two projects are the expansion of an ethylene plant in Nanjing, Jiangsu province, and the construction of a methylene diphenyl diisocyanate (MDI) plant in Chongqing municipality.
Hambrecht added that demand for chemicals “will not rebound this year. It may recover next year, or at the end of next year”.
BASF and Sinopec agreed in March 2008 to invest US$900m in the Nanjing project, raising annual ethylene capacity to 750,000 tons from 600,000 tons.
The US$4bn MDI plant was to have an annual capacity of 400,000 tons and was scheduled to enter operations in 2011. MDI is used to make polymers used in refrigerators and shoes.
BASF said a revised building schedule for the two projects would depend on market conditions.
The 350km Hefei-Wuhan high-speed passenger railway is due to open on 1 April, reported China Daily. Combined with the opening of the Hefei-Nanjing railway last year, these lines will help slash journey times between central China and the Yangtze River delta region.
Zhang Shuguang, chief of the transportation department of the Ministry of Railways, said trains running at 250 kph between Wuhan and Nanjing will take under three hours, almost eight hours less than now. Passengers travelling from Wuhan to Shanghai will have their journey time cut in half to four hours and 45 minutes, according to Zhang.
In response, airlines and bus companies are cutting prices. Wuhan-based Chutian Metropolis News reported that discounts of up to 70 per cent will be given to flights from Wuhan to Shanghai starting 1 April. The cost of a bus ticket will be reduced from Rmb185 to Rmb90 from 26 March. The ministry is also considering selling train tickets by phone and via the internet, with regions such as Guangdong and Chongqing piloting the schemes, Zhang said.
Currently, 200 high-speed trains pass through major cities in China, Zhang said, with 600 more expected to be operational by 2012.
Eight new companies settled in Zhangjiagang Bonded Zone in the first two months of 2009, involving a total investment of US$4.9m, up 49 per cent over the same period last year. Last November, the State Council approved a plan to merge Zhangjiagang Bonded Zone and Bonded Logistics Park into Zhangjiagang Free Trade Zone. This is the second free trade zone on the Yangtze. The other one is in Cuntan, Chongqing. Chinese goods entering the zone are treated as exports while foreign goods entering the zone are treated only as imports upon leaving the zone.
China News Service reported on 23 March that Mr Yang Youlin, General Manager of the Development Corp of Jiangning ETDZ and also the Deputy Director of the Administration of Jiangning ETDZ, had been accused of corruption. He allegedly gave all building contracts to Jiangyu Group, which he controlled, and siphoned off state assets worth a total of Rmb2bn. He also allegedly arranged US citizenships for his wife and daughter. It was not clear from the story whether he had been arrested.
Nanjing Jiangning ETDZ is a favourite with investors. Its location south of the city is convenient for both the airport and the man ring road. It lies 7km from the railway station and 20km from the port. The zone contains an international school, four universities and a large entertainment complex, and is home to more than 450 corporations including Ford, Fiat, Motorola, General Mills, Siemens, Ericsson, Kimberly-Clark, Mitsui and San Miguel.
The association of express delivery companies said that research and development will start shortly to standardise express delivery vans in China. The move is designed to increase vehicle recognition and facilitate compliance with regulations. China Transport Newspaper reported that this is part of a national plan to develop the logistics sector, one of the 10 major industries that China wants to focus on in the next 10 years. Standardising the vans will to some extent help companies to increase national coverage, said the newspaper.
According to Nanjing’s transport commission, a total of Rmb3bn has been set aside for renovation and building projects in the city’s rural areas within the next three to five years. The main focus will be on improving the quality of road surfaces and increasing coverage of the public transport network. Between 2000 and 2008, the local government spent Rmb5bn on the rural road network.
The spokesman for the National Tourism Board Liu Xiaojun confirmed on 23 March that a national holiday plan is being drafted, but denied that the national May Day Long Holiday is going to be re-instated any time soon, explaining that the long term impact as much as the immediate benefit to the economy would need to be assessed carefully.
Guangdong, Jiangsu and Zhejiang provinces were the first to have taken the initiative to issue free vouchers to attract tourists in a bid to stimulate consumption. This has sparked a nationwide debate as to whether the national May Day Long Holiday should come back again. The seven-day holiday was reduced to three days last year partly due to the tremendous pressure on the national transport infrastructure when millions of people travelled around the country at the same time. Some people have also pointed out that these tourist vouchers, paid for by taxpayers, are given only to people who can afford to travel. They called on the central government to take control and distribute such vouchers more fairly.
According to the port authority of Taicang, throughput of general cargo soared by 36 per cent year-on-year to nearly 7m tons during the first two months of this year, driven by metal ores and construction materials. Throughput of metal ores reached 20,300 tons, that of non-metal ores 211,600 tons, and that of construction materials 234,800 tons. The throughput of breakbulk cargo surged by 88 per cent to nearly 1.8m tons. Container throughput grew by 11 per cent year-on-year to 177,300 teu on the back of strong domestic trade and growing trade with Taiwan.
China Shipping Development Co (CDSC), China’s largest oil carrier, recorded a 16.9 per cent increase in 2008 profits, reported China Daily. Its net income climbed to Rmb5.37bn, on sales that increased 38 per cent to Rmb17.5bn.
The company’s performance was buoyed by rising demand for gasoline and other fuels in China, the world's second- largest energy user.
CSDC, part of China Shipping (Group), operates a fleet of oil tankers and dry-bulk vessels mainly for carrying coal. It has signed joint ventures and long-term contracts with its largest customers, including Baosteel and PetroChina Co.
The company plans to expand by 19 ships with total loads of 2.72m tons, comprising 14 oil tankers of 2.26m tons and five bulk ships of 460,000 tons.
East Star, the Wuhan-based private airline, was ordered to suspend flights in mid-March because of prolonged financial and management problems. The order was issued by a regional branch of the General Administration of Civil Aviation of China. Xinhua reported that East Star had failed to pay plane rental fees to GE Commercial Aviation Services, forcing the US firm to seek help from the local government and start legal action.
East Star started business in May 2006 and operated about 20 domestic passenger routes. It held about 10 per cent of the market share in Wuhan.
China’s total highway length is to exceed 3m km by 2020, an increase of 50 per cent from 2008, according to a plan released by the Ministry of Transport. Of the total, expressways will reach about 100,000km by 2020, up from 60,300km at the end of 2008, Xinhua reported.
The plan also said that by 2020, the annual cargo throughput of China’s coastal ports will rise to more than 6.5bn tonnes, from 4.4bn tonnes in 2008. Container throughput will reach 240m teu by 2020, up from 128m in 2008.
Japan’s Yusen Air & Sea Service opened a bonded warehouse on 1 March at Pudong International Airport in Shanghai, as part of a strategy to improve logistics services in China, the company said. The 800 sq metre facility takes over operations from local agents.
Yusen Air & Sea is the main logistics unit of NYK Line, Japan’s largest shipping company.
China’s fleet of LPG vessels is set to grow by 40 per cent over the next two years, with transportation capacity increasing 70 per cent, Seatrade reported from the 14th China International LPG conference.
Li Wanqin, from the China Shipowners’ Association, said 15 new LPG vessels were added last year to the Chinese merchant fleet giving a total of 110 vessels for LPG transportation in China, equivalent to 100,000 dwt. In 2009 and 2010, China will acquire 47 new LPG vessels, giving the country 170,000 dwt of LPG vessel capacity.
An agreement was signed on 16 March between Sino Petroleum, Pacific Oil and Gas and Jiangsu provincial State Assets Management Company to build and operate a Jiangsu liquefied natural gas (LNG) station. Construction will be split into two phases. The first phase, costing Rmb6bn and with the capacity to handle 3.5m tons of LNG and produce 4.8bn cubic metres of natural gas, involves the construction of an artificial island, an LNG receiving station, a jetty and undersea pipelines. The station will be located in Rudong county, Nantong, occupying 0.3 sq km. There will be a special LNG terminal, capable of accommodating the world’s largest LNG vessels of up to 267,000 cubic metres. The second phase will handle 6.5m tons of LNG and produce 8.7bn cubic metres of natural gas.
Meanwhile, Dalian Port Co said it planned to establsih a Rmb2.6bn LNG terminal joint venture with PetroChina.Dalian Port said it would hold 20 per cent of the joint venture, with PetroChina holding 75 per cent and the remainder held by Dalian Construction Investment.
The increased investment in railway projects under the central government stimulus package has led to a surge in demand for railway tracks. So far this year, the Ministry of Railway has ordered 3.25m tons of tracks. Only four major iron and steel plants in China are able to produce the special heavy duty tracks required: Panzhihua Iron and Steel in southern Sichuan, Anshan Iron and Steel in Liaoning, Baotou Iron and Steel in Inner Mongolia and Wuhan Iron and Steel in central China.
Reports from Baotou alone said that 110,000 tons of railway tracks had been dispatched up to 10 March, equivalent to 36 per cent of last year’s total.
According to the central government’s budget this year, Rmb103.5bn will be spent on roads, Rmb73.2bn on railways, Rmb24.2bn on airports and Rmb10.3bn on ports. Prominent projects include the Beijing-Shanghai express railway line and a number of railway lines in the interior, the Yangtze waterway, and airports in the middle and western parts of the country. Road building projects will aim to connect rural areas with urban areas.
The blueprint for Wuhan Tianhe Airport has been approved by the national aviation authorities and Hubei provincial government. Expansion work on the airport’s second runway and third terminal will start within the year, costing an estimated total of Rmb12bn. It is expected to take three years to finish. The 3,600km long second runway, on the eastern side of the first, will accommodate large aircraft such as the Airbus 380; the third terminal will be nearly twice as big as the second one.
In another development, Wuhan Port Group, the largest port operator in the city, has had its plan to build a 24-storey shipping centre approved by the city’s development and reform commission. It will be a gathering place for shippers, forwarders, shipping agents, Customs, banks, insurance and other related agencies to work together under the same roof.
Statistics from the Three Gorges Dam Administration show that the average waiting time for cargo vessels passing the five-step shiplocks has been halved to 4.2 hours; passenger vessels are still given priority and they now have to wait just an hour.
The reduction in waiting times is a direct result of a monitoring system that the administration has installed with an investment of more than Rmb70m. The system involves a control centre and seven monitoring stations that track the movement of more than 3,000 vessels entering the area. It allows all vessels to apply online for a time slot to pass the shiplocks; previously vessels had to book days in advance, which often led to slot times being wasted.
China Shipping Development Co, a subsidiary of China Shipping Group, was reported by China Knowledge to be teaming up with PetroChina International Co, an affiliate of China National Petroleum Corp, to set up a joint venture for liquefied natural gas (LNG) transportation.
The new company, which will be 90 per cent owned by China Shipping Development, expects to operate two to three ships costing US$160m each. Initially it will be responsible for importing LNG import from countries such as Australia and will probably cooperate with other shipping enterprise in the near future.
It is estimated that China’s LNG imports are likely to exceed 12m tons in 2010.
China should apply stricter standards in keeping potential polluters away from the Yangtze River, said Chen Qinghua, a member of the 11th National Committee of Chinese People’s Political Consultative Conference.
A monthly report on the country’s surface water quality showed the Yangtze was slightly polluted in December 2008 while its branches recorded medium-level pollution, according to the Ministry of Environmental Protection.
There is a high concentration of heavily polluting industries along the Yangtze. Nearly 10,000 of the 21,000 chemical companies in China are situated along the 6,300 km-long river, according to Chen. More than 20 chemical industry parks are under construction.
Local governments have built more than 40,000 reservoirs along the river and its branches in a bid for water resources, which has further degraded the Yangtze’s ecological system, he said.
"We should take the opportunity to improve sewage treatment facilities in cities, and move faster to readjust industrial layout and structure along the river,” concluded Chen.
Tianjin port is faring relatively well in the current downturn, according to a report by China Daily. Yu Rumin, chairman of Tianjin Port Group, said its container business had already started to pick up, and iron ore volumes were holding up well due to steel firms buying ore at much lower prices than existed last year.
Tianjin handled nearly 8m tons or iron ore in January, he said, more than the average 5m-6m tons in good years. Growth should continue for the rest of the year.
Tianjin, the third largest port in China for cargo handling, aims to transport at least 360m tons in 2009, 4m tons more than last year, he said.
Tianjin is located in north China, where the economy is much less reliant on exports than the south. This has helped shore up the port’s performance in recent months. To further reduce its reliance on exports, the port now plans to open new domestic shipping routes to Guangdong province and the Yangtze River Delta over the next 12 months, as well as raise its domestic container traffic from 30 to 50 per cent, he said.
China’s major coastal ports recorded heavy volume falls in February against the backdrop of a deteriorating foreign trade performance. Exports plunged 25.7 per cent in the month compared with a year ago.
Shanghai, the world’s second-busiest container port, handled 1.5m teu in February and 1.9m teu in January, representing year-on-year declines of 19 per cent and 17 per cent, according to Shanghai International Port Group.
Shenzhen, the nation’s second-largest container port, recorded an even steeper fall in container business, falling by 21 per cent in the first two months of this year.
Shenzhen Chiwan Wharf Holdings, which operates nine of the city’s 34 container berths with an annual capacity of about 6m teu, said volume declines had worsened in February. The Shenzhen-listed company posted a 24 per cent downturn in throughput in January and a 40 per cent fall in February. It handled 682,000 teu in the first two months of 2009.
In a separate announcement, China’s biggest terminal operator predicted its first ever zero growth in container throughput in 2009 as demand peters out in the mainland’s key export markets. China Merchants (Holdings) International has a 34 per cent share of the mainland container market, which company chairman Fu Yuning said would remain at 129m teu this year.
Nanjing Tanker Corp, a major domestic transporter of energy products, plans to add five new very large crude carriers (VLCC) to its fleet this year, the company has announced. The VLCCs, along with other new vessels that the company plans to put out to sea this year, will increase Nanjing Tanker’s shipping capacity from 1.82m tonnes to 3.82m tonnes. It transported 30.63m tonnes of products last year.
Nanjing Tanker was operating 58 ships at the end of 2008, only one of which was a VLCC. The company transports products for both domestic and foreign oil producers, including Sinopec, Shell and Exxon Mobil.
The British supermarket giant Tesco has signed a contract with Nanjing Wanda Plaza to open a Tesco supermarket in the Hexi New City area of Nanjing. The store is expected to open in December this year.
Tesco now has 58 hypermarkets in China plus five pilot convenience stores, reported China Retail News.
Other stores in the 275,000 sq metre Nanjing Wanda Plaza will include Vans Department Store, Wanda International Cinemas, Gome and Little Sheep.
Bank of China has signed an agreement to provide the central province of Hubei with Rmb300bn in loans for construction. The loans are to be used to support projects in urban infrastructure, transportation, electricity, iron and steel, automobiles and other industrial and agricultural projects. The bank also agreed to provide the state-owned China Three Gorges Project Corporation with up to Rmb50bn to finance the Hubei-based company’s ‘going global’ strategy.
Also in March, BOC signed an agreement with Sichuan province to provide areas hit by last May’s earthquake, with at least Rmb300bn in loans for reconstruction over the next five years.
Bridge construction in Chongqing is being speeded up, according to a municipal government website. Changshou Yangtze River Highway Bridge will be put into operation at the end of March, while construction work on Jiayue Bridge and Chaotianmen Bridge will be accelerated. By 2012, when the Hongyancun, Dongshuimen and Qiansimen bridges will be completed, Chongqing city proper will have a total 28 bridges over the Yangtze.
The water level in the Three Gorges Dam has been lowered by more than 10 metres over the past four months so as to maintain shipping conditions and demand for water in downstream locations. The water level behind the dam was 163 metres on 8 March, compared with 172.8 meters in early November, said the China Three Gorges Project Corporation. The dam will continue to discharge water for downstream use until April, according to an engineer of the station. Water levels are then expected to rise naturally during the wetter summer months.
Guizhou government is to spend Rmb200m this year on modernising the Wujiang River, part of a national waterway network. This will be the single largest investment the provincial government has made in the waterway. Upon completion, the Wujiang River will connect to the Yangtze River in the north and the Pearl River in the south, providing a route to the southwest coast. Preliminary work will finish by end of this year and the project is expected to start in 2010.
In another development, the provincial government has signed a framework agreement with the Ministry of Railways to build a network of railway lines that will connect one of the country’s poorest provinces to major cities such as Guangzhou, Shanghai, Beijing, Chongqing and Wuhan.
The Beijing-Shanghai Express Railway is being built at a rapid rate. Some 98 per cent of the 1,318km line is under construction, giving employment to 116,200 people. More than 70 per cent of the workers are returned migrants whose factories along the coast went under due to the global economic recession. After a period of training, they have started work on the biggest railway project in recent Chinese history. It is estimated that the number of workers directly involved in the construction could reach 600,000.
Started in April 2008, the project used a total investment of Rmb55.2bn last year alone, the single largest annual expenditure on a railway project in China. This year, expenditure is estimated at Rmb60bn. The railway line has a planned top speed of 350 kph and will pass through Tianjin, Hebei, Shandong, Anhui and Jiangsu before reaching Shanghai. Estimated figures show that the project will need 5m tons of steel, 380,00 tons of steel tracks, 27m tons of cement, 55m cubic metres of pebble stones, 33m cubic metres of sand and 60m cubic metres of cement.
The new railway line, scheduled for trial operation by 2010, is expected to take passengers, freeing up the existing Beijing-Shanghai line for freight.
Xinhua reported Li Heping, a researcher at the China Academy of Railway Sciences, as saying that trains will take less than five hours to make the journey from the capital to Shanghai, which is now at least 11 hours.
The researcher went on to say that current bottlenecks in China’s railway traffic system would be greatly eased by 2012 as a result of higher investment levels that form part of the Rmb4,000bn stimulus package announced last year. The Ministry of Railways has said it plans to have built 13,000km of passenger lines by 2012.
Statistics show that foreign trade value in the interior provinces in 2008 exceeded US$100bn for the first time, up 36 per cent over the previous year. The growth rate was 18 percentage points higher than the national average and 19.5 percentage points higher than the coastal region. The interior provinces include Chongqing municipality, Gansu, Guangxi, Guizhou, Inner Mongolia, Ningxia, Qinghai, Shaanxi, Sichuan, Tibet, Xinjiang and Yunnan.
Sichuan became one of just two provinces in China to record an increase in foreign trade during the first two months of the year, with its value growing 2.5 per cent year-on-year to US$2.67bn. The province reported total exports of US$1.76bn, up 26 per cent year-on-year, against the backdrop of a 21 per cent fall nationwide. Value of imports in Sichuan stood at US$910m, a decrease of 25 per cent, compared with a nationwide fall of 34 per cent. The other province to report an increase in foreign trade was Hainan, in southern China.
Statistics released by the Yangtze River Administration show that cargo throughput along the trunkline fell by three per cent to 73m tons, compared with the same month last year. Container throughput also fell by 2.6 per cent to 450,000 teu, the first fall since the start of the global economic crisis. Export-related cargo suffered the sharpest decline, nearly 11 per cent to 9m tons. “The situation is devastating,” said Johns Gu, deputy general manager of NYK Logistics China, which has several branch offices along the Yangtze. “Our boxes are going in, but not coming out because there is little cargo going overseas.” The company is cutting more jobs, having just closed down its Chengdu office.
January saw the first rise of 5.7 per cent in cargo throughput after three months of sharp falls: 17 per cent in October, 21 per cent in November and 30 per cent in December. Port officials predicted then that throughput was likely to fluctuate due to the worsening worldwide economic crisis, before stabilising towards the second half of the year.
Wuhan has re-started its container express service to Shanghai. The loaded 245-teu barge named Changhai Donghu set off from Wuhan’s Yangluo International Container Terminal on 3 March and reached Yangshan terminal in Shanghai within 48 hours. The containers were then re-loaded onto ocean-going vessels for the USA and Netherlands.
Initially started in May 2006, the service didn’t attract enough shippers within the first year or so and became commercially unviable.
Wuhan government announced recently that it will re-build its urban bicycle network this year in a bid to boost green modes of transport. The scheme involves establsih 800 outlets in the city centre where 20,000 bicycles will be provided free for use. Wuhan will probably be the first major city in China to promote such a policy.
Ningbo government has started issuing free vouchers from 2 March worth Rmb30m to encourage tourism and air travel by its citizens. Some Rmb10m-worth of vouchers are for use when buying air tickets and the remaining Rmb20m is for tourist spending money. A booklet includes two Rmb100 denominated vouchers for spending and five Rmb20 denominated vouchers for use when purchasing air tickets. People with Ningbo ID cards or temporary residence are entitled to one booklet each.
ABB has opened an engineering centre in Chongqing for its process automation division. The Europe-based supplier of power and automation technology said the new centre would integrate its engineering service resources in China. It will serve ABB’s local marine, crane, minerals, pulp and paper, metals, oil, gas, petrochemical and electrification business units.
Currently, ABB has 15,000 employees in China and operates 27 joint ventures and wholly owned companies. It has existing engineering centres in Beijing and Shanghai.
Tongling Nonferrous Metals Group made net profits of Rmb637m in 2008, down 38 per cent from the previous year. Its revenues stood at Rmb37.3bn, up 0.82 per cent.
The company is a major state-owned producer of copper, sulphuric acid and other products. It was among the world’s five largest copper cathode producers last year with an output of 800,000 tonnes.
Sinopec’s new 50,000 tons polyols project in Taicang is predicted to come into operation in May 2009. Construction of the Rmb100m project started at the end of last year.
China’s cement consumption may increase 6.3 per cent to 1.54bn tons in 2009, according to Guo Wenlong, a researcher at the National Development and Reform Commission.
Guo said demand would be driven by the transportation, logistics and warehousing sectors, set to consume some 180m tons of cement in 2009, 27 per cent more than last year.
This increase in consumption, much of which can be attributed to the central government’s Rmb4,000bn stimulus package, is likely to compensate for shrinking demand in the depressed property sector, said Guo.
Last year, China produced 1.38bn tons of cement, up 5.2 per cent from a year earlier, and consumed 1.45bn tons, according to the National Bureau of Statistics.
Taiwan’s Wan Hai Lines is in talks to invest in a mainland shipping company to expand its network and offset the severe industry downturn that is likely to impact its revenues this year, Dow Jones reported.
Wan Hai Lines, the largest container shipping firm on intra-Asia routes by market share, has been cutting capacity on the Asia-Europe route and restructuring its network because of the downturn in global trade and vessel overcapacity that has slashed freight rates and profit, company president Tony Chow said.
An investment in a Chinese shipping firm would allow Wan Hai Lines to exploit the expected growth in China’s river transport and trade between China and Southeast Asia, Chow said.
"We are positive on the domestic demand stimulus package implemented by the Chinese government, which will also create intra-Asia cargo as China and Asean remove trade tariffs,” he explained.
Chow did not reveal to name of the Chinese company, but said a conclusion to the talks was likely to take time because Wan Hai wants a stake of at least 51 per cent in the firm.
Taiwan and China agreed on closer transport links in November, including launching direct daily charter flights and direct shipping links, but restrictions remain on cross-strait business. For example, Taipei prohibits investment in container terminals on the mainland, and branch offices can only deal with cross-strait cargo. This means Wan Hai Lines must first ship Chinese cargo to a Taiwanese port before carrying it to a third destination, said Chow.
Investing in a Chinese liner would give Wan Hai Lines, which has 20 offices in China, immediate access to China’s river cargo business, he said. “There’s a lot of coastal and Yangtze River cargo that we can’t do now.”
Suning Appliance, one of China’s largest privately-owned electrical appliance retailers, is to build a large-scale logistics base in Chengdu, Sichuan province. The base, which will be situated in the Longquanyi district of the city, will complement the group’s three established bases in Nanjing, Beijing and Hangzhou. When the new base is operational in two years, it will be the biggest electrical appliance distribution centre in Sichuan.
Carrefour, the world’s second largest retailer, plans to open two or three chain stores in Yichang, Hubei province, reported China Knowledge.
According to the report, double digit economic growth for five the past five years in Yichang convinced Carrefour of the potential consumer market in the city.
Carrefour has five chain stores in Wuhan, the capital city of Hubei, each with an average annual turnover of Rmb320m. It has more than 130 chain stores across China.
Jiujiang airport in Jiangxi province handled 43,000 passengers in 2008, five times the 2007 number and the highest total it has ever recorded, according to the airport website.
This represents a healthy turnaround for an airport that has experienced serious difficulties in recent years. It has been closed for about half of the time since opening in 1996 due to low traffic levels. Its latest reopening was in 2006.
With a capacity to handle 500,000 passengers a year, Jiujiang airport is only 10km from the south gate of the popular tourist attraction of Lushan Mountain. However, more tourists bound for the mountain preferred to use alternative airports such as Nanchang, which despite being further away had good expressway links to the mountain area.
In response, Jiujiang airport began offering passengers special discounts on Lushan’s entrance fees. It also subsidised flights landing at the airport to attract more services, Jiujiang Daily reported.
These measures appear to be working and the airport has already started flights to Beijing, Shanghai, Guangzhou and Xiamen.
However there is no room for complacency, according to Xu Faxin, who was in charge of the airport’s reopening in 2006. He said it needs to focus more on cargo transport and adopt new strategies to lure tourists headed for Lushan.
Construction work has begun in Tianmen city, Hubei province, on a new, multi-purpose dam on the Hanjiang River, the Yangtze’s largest tributary. The Xinglong Dam is an important element of the central route of China’s massive south-to-north diversion plan to bring water from the Yangtze to the dry northern regions of the country.
Zhang Jiyao, chief of the Office for the South-to-North Water Diversion Project of the State Council, said the dam would cost Rmb3.05bn to build.
Xinglong Dam is designed mainly to help irrigation of farmland on both banks of the Hanjiang River as well as improve shipping conditions when the river is in the dry season. It also has power generation and flood control functions. A total of 1,240 residents in Hubei will have to be moved to make way for the dam.
The 1,532km-long Hanjiang River originates in Micang Mountain in northwest China’s Shaanxi province and flows in a southeasterly direction to join the Yangtze at Wuhan, Hubei province.
China’s international air cargo volume fell 28 per cent year-on-year to 264,334 tonnes in February, according to figures released by the Civil Aviation Administration of China (CAAC), while international passenger volumes dropped 16 per cent. In January, cargo volumes decreased 29 per cent to 264,334 tonnes.
The CAAC said international aviation traffic is expected to record a sharp fall in 2009 because of weakening demand resulting from the global financial crisis. By contrast, domestic passenger numbers are likely to grow 10 per cent as a result of government measures to boost the economy.
From 17 February, a new pass system started a trial run on all expressways in Zhejiang province. This yellow pass contains a chip that is able to record the actual mileage of a vehicle and thus adjust the toll fee accordingly. A total of 100,000 passes have been issued for the trial run, which will be used in conjunction with the existing ones; for the time being, toll fees will not be calculated according to mileage. Fifteen reading systems have been installed on major expressways such as the Shanghai-Hangzhou-Ningbo expressway.
In another development, the provincial government commissioned a health check on all its expressways and concluded that most of them were well maintained and in good shape. In 2008, official statistics showed that the provincial government spent a little over Rmb1.2bn on maintaining its expressways, equivalent to about 10 per cent of its total income from 2007 tolls.
The worldwide economic downturn has affected China’s export-oriented factories on a big scale. By the end of February, the number of migrant farmers returning to Wuhan alone reached 38,300 and the number is increasing. According to local government statistics, about 27,500, or 72 per cent of the total, have found employment so far. Some 300 of them started their own business, while 8,500 joined various re-training schemes provided by the government.
Helping returning migrant farmers find work is now a top priority for the Wuhan government. Forty three job-seeking conferences have been planned especially for migrant workers. The government has introduced a number of measures, including providing small loans to help returning farmers set up their own business. For those companies that have cashflow problems but are not cutting jobs, the local government has pledged to subsidise their social security provisions for their employees for up to six months.
The Yangtze Waterway Bureau has announced that dredging projects will start in May along the stretch between Wuhu and Nanjing so that the minimum guaranteed water level will rise from 7.5 metres to 9 metres between July and September and from 6 metres to 7.5 metres in other months of the year. This means that by end of the year, the guaranteed water level throughout the navigable length of the Yangtze will be increased. According to official statistics, one more metre in water depth allows a vessel to carry an extra 1,000 teu, thus reducing shipping costs.
The Wuhu-Nanjing stretch is one of the busiest on the Yangtze. In a separate development, the waterway authorities plan a major dredging project to guarantee an all-year-round water level of 12.5 metres up to Nanjing by 2012.
The Yangtze River Administration of Navigable Affairs under the Ministry of Transport announced on 11 February that a digital waterway map for the entire Yangtze trunkline would be available by the end of this year. Vessels equipped with digital waterway map systems will be able to unload the latest version, which shows information such as water levels, locations of shoals, ports and anchoring areas, thus helping vessels to charter their journeys safely and efficiently.
The Digital Waterway is an integral part of the Yangtze modernisation programme. By 2015, the government hopes to build a digital network for the navigable Yangtze, including digital mapping and real-time transfer of data to measure and profile waves, currents, discharges and sedimentation. Information will be shared across the different sections of waterway management, such as emergency services, life-saving, piloting and safety inspection.
February 2009 Sinopec has started construction of a Rmb14bn ethylene plant in Wuhan, capital of Hubei province.
The plant will have a production capacity of 800,000 tonnes a year, according to a government statement.
Sinopec owns a 65 per cent share in the chemicals facility, with the remainder held by South Korea’s largest refiner, SK Energy.
The investment is part of the central government’s plan to build major ethylene production bases in central and western parts of the country, where demand for petrochemicals is growing particularly fast.
In addition to the 800,000 tonnes of ethylene, the project will also produce important petrochemical products, including 300,000 tonnes a year of high-density polyethylene, 300,000 tonnes a year of linear low-density polyethylene and 400,000 tonnes a year of polypropylene.
Commodity shipping rates in India, which rose in early February, were expected to fall in the near term, industry observers told DNA India on 24 February.
The comments followed a drop in demand for Indian iron ore from China, which was negotiating long-term contracts with Australia and Brazil. The contracts were expected to be finalised within the following 10 days.
While China, the world’s largest iron ore importer, sources most of its committed iron ore from Australia and Brazil, the majority of its short-term spot requirements are met by imports from India. About 80 per cent of India’s iron ore exports are destined for China.
According to one shipping agent, no China-bound iron ore cargo had moved out of India in the previous four days. The situation had worsened so much that exporters who had committed ships and had already brought the cargo in the port were faced with situations where buyers had withdrawn.
Loans by the Industrial and Commercial Bank of China, the country’s largest bank, soared in January in response to government calls to support the weakening economy. The bank extended Rmb117.1bn of new loans last month, equivalent to 22 per cent of the amount lent in the whole of 2008.
Some 59 per cent of the total, Rmb69.3bn, was directed to infrastructure projects including railways, roads, power grids and nuclear power stations.
Late last year China urged local lenders to increase credit to support its RMB4,000bn stimulus package aimed at stimulating economic growth.
FedEx has cut its express service prices by 70 per cent in a bid to win bigger market share in China, Xinhua reported. According to the story, FedEx China cut its prices four times between October 2007 and August 2008 to bring them into line with those set by domestic private express firms.
Statistics from the China Federation of Logistics and Purchasing showed that FedEx's market share increased to 4.8 per cent at the end of September from 0.8 per cent at the end of June, putting it ahead of its major overseas competitors, UPS, DHL and TNT.
The US-based FedEx entered China in the 1990s and it now has operations in more than 220 Chinese cities.
Meanwhile, DHL Express Worldwide said it would centralise some mainland Chinese operations in an effort to improve efficiency, South China Morning Post reported. However, the company denied an earlier media report that it would move some operations from first-tier cities to Chengdu so as to reduce labour costs. It has a total of 82 branches across the mainland.
For its part, TNT’s wholly-owned China operation TNT-Hoau has launched its first domestic day-definite road distribution service in the country. The service will first be offered between 115 depot pairs covering the key economic areas of the Yangtze River Delta, Bohai Economic Rim and the Pearl River Delta regions. Coverage will be increased to more than 260 depot pairs by July 2009. All shipments will be bar-coded to allow customers to ‘track and trace’ their shipments via the internet.
Construction of the Rmb 62bn Chengdu-Lanzhou railway, linking the capitals of Sichuan and Gansu provinces, got under way on 21 February.
Due to be completed in December 2014, the 731km line will reduce the journey time between the two cities from more than 17 hours to about four hours.
The line is designed to boost economic development in northwest and southwest China, and provide a stimulus for tourism in these areas. It will pass through Jiuzhaigou in Sichuan, a UNESCO World Cultural Heritage site, and Gannan Tibetan autonomous prefecture in southern Gansu, another popular tourist destination.
The line will link with the Lanzhou-Chongqing, Baoji-Chengdu, Sichuan-Qinghai and Sichuan-Tibetan lines, construction of which will also start this year.
A major new reservoir near Chongming Island at the mouth of the Yangtze will start supplying water to 18m Shanghai residents before 1 May 2010, when the Shanghai World Expo begins. Zhang Quan, director of the Shanghai Environmental Protection Bureau, said construction of the Qingcaosha reservoir dam was completed in late 2008.
"By late next year, around 70 to 80 per cent of the overall population in Shanghai will get access to the better-quality drinking water from the Yangtze River,” China Daily quoted Zhang as saying.
Qingcaosha will be able to store 435m cubic metres of water and provide more than half of the city’s water needs with an estimated daily supply of 7.2m cubic metres.
The reservoir will be the third major water source for Shanghai; one located on the upper reaches of the Huangpu River currently contributes 80 per cent of Shanghai’s water, with the rest supplied by Chenhang reservoir.
Although Shanghai has abundant water resources due to its location at the mouth of the Yangtze, it has long been suffered from poor water quality. High emission rates of ammonia and nitrogen in the upper reaches of the Huangpu River and salt tides, which mostly occur during the drier winter months, are two major problems.
Chinese home appliance and consumer electronics retailer Suning is to invest several billion renminbi on constructing nine logistics bases around China, said the company’s president Sun Weimin. Xinhua reported that the bases would be built in Shenyang, Tianjin, Beijing, Wuxi, Chengdu, Chongqing, Xuzhou, Suzhou and Shanghai, and cover a combined area of 400,000 sq metres. Suning also hopes to cooperate with third parties to establish a further 16 logistics bases, with the ultimate aim of operating some 60 logistics bases nationwide.
The company is planning to enter 70 new cities this year, opening a minimum of 200 stores.
The global sports apparel maker Nike is to invest US$99m in a new distribution centre in Taicang, Jiangsu province, reported China Sourcing News. The 120,000 sq metre facility in Taicang Economic Development Area will provide distribution support for Nike’s footwear, apparel and equipment products.
Construction will begin in spring 2009 and the centre will be put into operation in the third quarter of 2010. It should reach full initial capacity by the second quarter of 2011.
Mr Willem Haitink, vice president and general manager for Nike China, said the new centre would help to reduce delivery times by up to 15 per cent.
On 19 February, an inspection team from the General Administration of Customs visited Rugao terminal in Nantong, Jiangsu province, and approved its status as an open terminal that can accommodate foreign vessels. The stretch in question is 11.6km long and contains 35 berths, serving largely the chemical, petrochemical, shipbuilding and logistics sectors.
Under the current 11th five-year plan, 15 quays are planned to be built at Rugao to create a transhipment centre for oil and petrochemical products and bulk cargo, a distribution centre for materials and a logistics centre.
The State Development and Reform Commission has recently approved the feasibility report on Jiujiang No.2 Yangtze Bridge. Construction of the road bridge is scheduled to start in July. Located 10.8km upstream of the city’s No.1 Yangtze Bridge, the second bridge forms part of the Fuzhou-Yinchuan Expressway, connecting the capitals of Fujian province and Ningxia autonomous region. Allowing a top speed of 100kph, the six-lane bridge will also link with the Nanchang-Jiujiang Expressway, further improving the road network between the interior and the coast.
The bridge will be funded jointly by Jiangxi and Hubei provincial governments. The 11.26km southern approach road and the bridge itself, 5.53km long, will cost Jiangxi nearly Rmb4bn. Construction is expected to take three years to complete and the bridge will open for traffic by 2012.
Container throughput in Hong Kong and Shenzhen fell significantly in January.
Hong Kong port’s container throughput fell 23.2 per cent last month from a year ago to 1.62m teu, South China Morning Post reported, its biggest fall since the early 1990s. Shenzhen port’s throughput experienced its worst ever monthly decline, falling 17.5 per cent to 1.526m teu.
Although last month’s decline in Hong Kong was smaller than the 24.1 per cent drop in December, last month should have been bolstered by the traditional cargo rush before the Chinese New Year, according to Sunny Ho Lap-kee, executive director of the Hong Kong Shippers’ Council.
"February and March will be a lot worse than January,” he added. “We'll be lucky if February’s throughput in Hong Kong is a third of January’s.”
This is because throughput tends to fall more than 60 per cent in the month following the Lunar New Year from the previous month, Ho said. "Factories have not started production yet. There are virtually no orders.”
Because of this lack of orders, many workers who went home for the Chinese New Year have delayed returning to the factories in the Pearl River Delta.
Air China will launch two direct flights from Wuhan to Paris and Tokyo this year, according to a local government website. Wuhan, the capital of central Hubei province, is a major transportation hub, with several important railway and highway arteries running through it. The city’s airport currently has international flight routes to Seoul in South Korea and Ho Chi Minh City in Vietnam.
In a separate development, South Korea will open a consulate general in Wuhan in 2009. It will become the third country to set up a consulate in the city after France and the US.
South Korea is Hubei’s fourth largest trade partner. By the end of 2007, a total of 62 Korean companies had invested in Wuhan with a combined investment of US$217m. Friendship city ties have been established between Wuhan and Cheongju City as well as Hubei’s Jingzhou and Korea’s Gangneung.
Shanghai-based TNT-Hoau, a wholly owned subsidiary of TNT Express, has officially entered China’s domestic road distribution market. China Knowledge reported that the company plans to start new service trials in 115 depots in key economic areas such as the Yangtze River Delta, Bohai Economic Rim and the Pearl River Delta regions; the number is expected to increase to more than 260 by July 2009.
TNT Express is the only express company that operates road distribution and international express businesses in China, said Michael Drake, board manager of TNT's Asia-Pacific operations.
Alstom’s new factory for Wuhan Boiler Co will be built and put into operation in the suburbs of Wuhan in the second half of this year, reported People’s Daily. Wuhan Boiler is 51 per cent-owned by Alstom. Upon construction, it will become Alstom’s largest boiler facility in the world.
The Europe-based supplier of services and equipment for the power generation and rail transport industries has decided to expand its investments in China in 2009, said Patrick Kron, the company's Chairman and CEO. He noted that the central government’s Rmb4,000bn stimulus package includes investments in environment-friendly infrastructure, which means a favourable investing environment and significant business opportunities for Alstom.
The Ministry of Environmental Protection is to investigate firms that discharge waste into the Yangtze River and punish those that do so illegally, reported China Daily.
Vice-minister Zhang Lijun said that the ministry will inspect businesses in 10 provinces and municipalities that the river flows through, starting in February.
"The main task is to figure out the number of waste channels and the main wastes dumped into the river,” he said.
Jiangsu provincial government says that it plans to invest more than Rmb81bn on transport infrastructure in 2009. Out of this total, Rmb35bn will be spent on railways, Rmb31bn on roads, Rmb9.6bn on ports, Rmb3.3bn on waterway dredging and Rmb1.4bn on airports. Last year, Jiangsu’s spending on transport infrastructure topped the national league, totalling Rmb77bn.
Changsha city government announced on 10 February that the first phase of its urban light rail system costing Rmb22.2bn would start construction this year. Approved in mid January by the State Council, the first and second lines will be completed by 2015. The government has already set up Changsh Light Rail Transport Corporation to own the project and a construction management commission.
In another development, Wuhan has started building a 3km-long tunnel under the Yangtze, which will form part of the city’s second metro line. The project will take just over three years to complete.
Changsha is located on the Xiangjiang River, a Yangtze tributary, and is an important feeder port to Wuhan.
The Railway Commission of Jiangsu province announced recently that six new rail passenger lines worth a total investment of Rmb65bn will start construction this year in the northern part of the province, traditionally much under developed than the southern part. Four of them have a designed speed of200km per hour.
Statistics show that Chongqing utilised Rmb123bn-worth of investments relocated from the east coast of China over the past three years. Some Rmb66.1bn was channelled into the municipality in 2008, more than double that of the previous year. The relocations mainly came from Guangdong, Beijing, Shanghai and Zhejiang, which accounted for about 60 per cent of the total relocated investments.
The Yangtze Waterway Bureau is to announce actual water levels on 16 major shoals in the trunkline on the 1st, 11th and 21st days of the month, on top of the monthly guaranteed water levels released during the second half of the previous month. The new measure will allow shipping lines to adjust their shipload accordingly, not only to avoid the risk of being stranded but also to maximise capacity.
According to Minsheng Shipping, the largest private barge operator in the Yangtze, the guaranteed water level at several shoals in the middle reaches announced in January for the following month was 2.9 metres but on 11 February the actual level increased to 3.1 metres due to the water release cycle of the Three Gorges Dam. The greater frequency of water level announcements will allow shipping lines to better optimise the number of containers they can load onto a 150-teu barge and thereby realise significant cost savings.
Chinese exports in January dropped 17.5 per cent year-on-year, the country’s biggest decline in more than a decade. Imports to China declined by 43.1 per cent, an indication of sharply lower demand in the Chinese economy. Lower raw material prices were another reason for the decline in imports, but analysts said it also reflected reduced investment by private firms. Imports of copper products fell 19 per cent.
January was the third month in a row that Chinese exports fell, although the rate of fall was much faster than the 2.8 per cent drop in December. The decline in imports also accelerated sharply from the 21.3 per cent contraction in December.
Economists cautioned that year-on-year comparisons were complicated by the fact that the Chinese new year holiday fell in January this year and in February last year. This meant there were fewer working days in January this year.
The volume of imported scrap steel hit a record high of 334,000 tons in Zhangjiagang port in January, more than 18 times that of January 2008. Analysts believe that increased government spending to boost the economy has stimulated demand for steel and major local steel plants such as Shagang, Yonggang and Puxiang Stainless Steel have needed to import large quantities of raw materials to fulfil their order books. Also, for these plants, converting imported scrap steel in the production process is more cost effective than imported iron ore.
Plummeting ocean shipping prices have also contributed to the January surge in scrap steel volumes: several old vessels went direct to the scrap heap after their final journey to Zhangjiagang port.
Fog has continued to cause serious problems for shipping in the Shanghai region. More than 300 vessels were stranded in the Yangtze River Estuary on 8 February, the local maritime authority said. Visibility was 500 meters in some places, and the ferry service between the city’s downtown area and Chongming Island was suspended.
Clear weather on the previous day allowed more than 1,000 stranded vessels to set sail.
China’s aviation market reported a single digit growth in air traffic in 2008 for the first time in five years.
Passenger volume rose 3.3 per cent to 192m last year, down from 16 per cent in 2007; cargo volume increased by just 0.3 per cent to 4m tons compared with 13 per cent in 2007, the Civil Aviation Administration of China said. In December, domestic airlines carried 15.67m passengers, a rise of 8.2 per cent from a year earlier, and delivered 307,853 tons of cargo, a drop of 15.2 per cent.
Passenger numbers are expected to increase by 11 per cent in 2009, with cargo growth predicted at 8 per cent. CAAC said the upturn would come about as a result of stimulus plans to boost demand.
These included waiving several fees and taxes that airlines have to pay, and urging carriers to cancel or postpone plane deliveries due this year and parking unnecessary planes.
China should place more emphasis on environmentally sustainable transport systems that can help reduce its heavy reliance on oil, according to a new Asian Development Bank publication.
China has made great advances in transport infrastructure over the past few decades, with its highway system growing nearly 300 per cent in 26 years, air passenger traffic in kilometres travelled tripling in size from 1995 to 2006, and its rail network growing 45 per cent since 1980.
At the same time, according to the publication, it has become the world’s fastest-growing oil consumer, with 35 per cent of the total consumed going into road transport alone as private motor vehicle use soared in step with rising personal incomes. As a result, the transport sector now accounts for around 7 per cent of China’s greenhouse gas emissions, up from 5.4 per cent in 1990. By 2030, the proportion is expected to rise to 11 per cent of the nation’s emissions.
Among recommended actions are a national transportation fund to focus on sustainable transport development; faster implementation of a fuel tax that discourages excessive motor vehicle use; more investment and regulatory reform for railways; special funds to develop inland waterways, and campaigns to promote the use of public transport.
Maersk Line, the world’s largest container shipping line, has closed its Greater China headquarters in Beijing and halved the number of its mainland sub-regional offices against a background of slowing demand, the South China Morning Post reported. Three sub-regional offices – in Xiamen, Shenzhen and Guangzhou – are to be merged into the three others -- in Qingdao, Shanghai and Hong Kong – that will now cover north China, east China and south China.
Maersk Line’s operations in Greater China are to be grouped under its north Asia regional office, headquartered in Hong Kong. Beijing will remain as the mainland headquarters of Maersk Group, which also has terminal operations and logistics services.
The company said the restructuring was not aimed at cutting costs.
Accelerating investment in transport infrastructure in China’s interior has halted the recent sharp decline in cargo throughput at ports along the Yangtze River, according the latest official figures.
In January 2009, the major ports along the Yangtze trunkline reported a year-on-year cargo throughput increase of 5.7 per cent to 80m tons, the first monthly rise since last August. Container throughput increased 19.6 per cent to 550,000 teu, compared with eight per cent in November and 14 per cent in December.
According to statistics released by the Yangtze River Administration under the Chinese Ministry of Transport, cargo throughput reached 1.15bn tons in 2008, up 9.2 per cent year-on-year. However there was a marked downturn in activity towards the end of the year due to the impact of the worldwide economic downturn. Throughput increased by 14 per cent during the first nine months, followed by zero growth in September, and falls of 17 per cent in October, 21 per cent in November and 30 per cent in December.
Higher levels of government spending to construct railways, roads, bridges and metros is driving the demand for imported iron ore and construction steel, two of the major commodities shipped on the Yangtze. According to the recently revised blueprint for the national rail network approved by the State Council at the end of October, planned new lines for the period up to 2020 will more than double from 16,000km to 41,000km. In 2009 and 2010, work will start on 20,000km of the new lines, including the Chongqing-Guizhou and Guizhou-Guangzhou lines, two major routes that connect the interior to the south coast.
Projects to improve shipping conditions on the Yangtze are also making the river a more viable mode of freight transport, according to Mr Tang Guanjun, newly appointed director of the Yangtze River Administration. “Huge investments in developing the Yangtze in recent years, involving dredging the waterway and modernising the ports, have made Yangtze shipping the backbone of the transport network for industries along the riverbank and beyond,” he said.
Detailed January commodity figures are not yet available, but according to major iron ore-handling ports such as Zhenjiang, iron ore volumes are picking up as steel producers add to their stockpiles to take advantage of iron ore prices that have fallen to about 40 per cent of their 2008 peak.
Reconstruction efforts in the aftermath of the Sichuan earthquake last May, sometimes involving the creation of entire new towns, continue to drive demand for building materials such as sand, stone and cement.
The single largest commodity shipped on the Yangtze, iron ore, accounted for more than 20 per cent of the total cargo throughput in 2008, increasing 4.7 per cent year-on-year to 210m tons. Iron ore throughput grew 22 per cent in the first half of the year, before slowing in the third quarter and falling by 17 per cent in October, 28 per cent in November and 38 per cent in December.
Coal and building materials, the second and third largest commodities shipped on the Yangtze, followed a similar pattern. Throughput of all the leading three commodities combined reached 557m tons last year, accounting for nearly 55 per cent of the general cargo total.
Similarly, container throughput during the first nine months grew by nearly 31 per cent but the pace slowed to 20 per cent in October, eight per cent in November and 14 per cent in December. Over the whole year, throughput increased 25 per cent to 6.92m teu, compared with 38 per cent in 2007.
These slowdowns in the container sector are less pronounced than in the export-driven ports along the coast. Throughput at China’s two largest ports, Shanghai and Shenzhen, fell by 6 per cent and 15.7 per cent respectively in December, the sharpest falls on record. “To a certain extent, we are less affected by the rapid shrinking of foreign trade than in the coastal ports because of continued robust domestic trade,” said Mr Gu Qiangsheng, executive deputy general manager of Wuhan Port Group. He believes, however, that it will take until May or June for government efforts to stimulate consumer demand to be translated into sustained and strong cargo growth.
Mr Huang Qiang, Communist Party Secretary of the Yangtze River Administration, agrees that there could be “a few more difficult months before we can be certain that we have come out of the woods in terms of throughput. But we are confident that business will improve markedly in the second half of 2009 and annualised cargo growth will be in the region of 9 per cent.”
Registration will close soon for early bird delegates of the Yangtze Business Network 2009 conference in Shanghai. Held on 15 April, the conference will explore the logistical challenges involved in accessing China’s vast interior. Delegates will hear the experiences of FIEs with established operations in central and western China, and learn about the latest developments of modernising the Yangtze corridor and government initiatives to improve the investment environment. Those registering by 16 February will be entitled to a US$300 discount off the full rate.
On the day following the conference, there is an optional logistical fact-finding trip to Wuhan. More details on both events can be found at http://www.yangtzebusinessservices.com.
Digging work on two tunnel that will form part of the Guiyang-Guangzhou railway line started on 1 February, signalling the beginning of construction of the 857km line between the capital cities of Guizhou and Guangdong provinces. The inter-city line with double electrified tracks is one of the major rail projects in the 11th five-year plan.
The high-speed line will cater for both passengers and cargo and will take six years to complete at an estimated cost of Rmb85.8bn. It will connect with the Chongqing-Guiyang New Line by 2015. The 67km-long New Line, costing Rmb7bn, will also be double-tracked and will cater for containers as well as passengers. Both projects are crucial elements of the central government’s ambitious plan to extend the national rail network to the interior.
The GDP of central China’s Hubei province stood at Rmb1,130bn in 2008, said Hubei Statistics Bureau. This was 13.4 per cent more than in the previous year and the fifth year in succession that the growth rate had exceeded 10 per cent.
Construction has begun on Chengdu’s first upscale European upscale shopping mall. The 86,000 sq metre Galleria is scheduled to be in trial operation by mid-2010. The mall hopes to attract clothing retailers, jewellers, restaurants, beauty salons and a cinema.
The Rmb650m project is being developed by GTC Real Estate of the Netherlands and Hong Kong’s Lucky Hope Group. GTC entered the China market in 2005, and has so far invested a total of Rmb1.6bn in seven residential and business projects in Shenyang, Xian, Hangzhou and Changzhou.
Erez Applerot, CEO of GTC China, said prices in the mall would reflect Chengdu’s consumption level. It would not sell luxury goods, he added, but instead it would target the middle class.
The value of imports and exports passing through China’s bonded zones and other special areas increased 17 per cent year-on-year to US$300bn in 2008, said China Customs. Exports grew 21.7 per cent to US$152.6bn and imports rose 12.2 per cent to US$146.9bn.
Bonded processing and logistics zones, as well as bonded ports and other special areas, accounted for 28 per cent of China’s processing trade volume in 2008. China has 94 such zones, offering protective tariffs for imported goods and simplified customs procedures.
Dense fog on 2 February delayed or cancelled more than 700 ships in the mouth of the Yangtze River. Visibility was less than 1,000 metres and in some areas below 100 metres, according to Shanghai Maritime Safety Administration. Sixty-six of the vessels were for international shipping, most of them in harbour at Waigaoqiao and Yangshan terminals. More than 2,000 vessels pass through Shanghai every day.
On the morning of the same day, fog also caused the closure of Shuangliu International Airport in Chengdu, resulting in 10 flights being cancelled and another 121 being delayed. This was the third closure of the airport in a month due to fog. The previous closures, which occurred in the second half of January, affected nearly 200 flights and stranded more than 15,000 passengers.
The airport is one of the busiest transport and distribution centres in southwest China.
In January 2009 total cargo throughput for the major ports along the Yangtze trunkline stood at 80m tons in, 5.7 per cent more than in the same period last year. Of this total, 9m tons was foreign trade related, up 1.2 per cent year-on-year. Container throughput reached 550,000 teu, up nearly 20 per cent.
Yangtze cargo throughput declined rapidly in the final third of 2008 as a result of the worldwide economic downturn. For November and December, cargo throughput decreased to the equivalent of 80-90 per cent of that of the same period in 2007, while growth in container throughput slowed down sharply from 20-30 per cent to around 15 per cent.
“All ports nationwide are affected by the economic downturn, but the Yangtze ports are withstanding the pressure better than the sea ports because of robust domestic trade,” said Mr Gu Qiangsheng, executive deputy general manager of Wuhan Port Group, the largest port operator in the middle reaches of the Yangtze. He predicted that, by June, throughput would rise to similar levels recorded in the first half of last year as the central government’s Rmb4,000bn stimulus package filters through the infrastructure projects in the interior and demand for bulk cargo such as cement and iron ore picks up again.
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