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October 2009 Coca-Cola has opened a new bottling plant in Wuhan’s East Lake District. It is the soft drinks giant’s 39th bottling plant in China, and the third to open in 2009. With an investment of Rmb600m, it is Coca-Cola China’s largest single investment in still beverage production facilities. It will make a range of drink brands including Minute Maid juice drinks, Minute Maid Pulpy Milky, Qoo-series juice drinks, and tea products such as Nestea and Original Leaf.
The plant will employ 200 workers and will indirectly generate another 2,000 jobs including suppliers and distributors.
Meanwhile, arch-rival Pepsi has opened a new plant in Chengdu, capital of Sichuan province.
In the next two years, Pepsi will set up additional beverage plants in Kunming, Zhengzhou, Quanzhou, Lanzhou, and Nanchang.
Wuhan Iron and Steel Company, the listed arm of Wuhan Iron and Steel (Group) Corp, posted a 76 per cent decline in net profit in the third quarter of this year due to falling sales. The company has been hit by continuing uncertainties in the domestic steel industry against the backdrop of the global economic downturn.
The company’s net profit stood at Rmb547m during the July-September period, and its net profit in the first nine months amounted to Rmb1.05bn. This compares with a net profit in the January-September period last year of Rmb7.17bn.
Wisco’s business revenue was Rmb37.4bn in the first nine months, down from Rmb58.13bn in the same period last year.
Hong Kong International Airport recorded the world’s largest cargo throughput in 2008 with a total of 3.63m tons. It was followed by Seoul, Tokyo, Paris and Frankfurt, according to statistics released by Hong Kong’s Census and Statistics Department.
Throughput at Hong Kong has been growing at an average annual rate of 7 per cent since 2003.
In a separate development, China Southern Airlines has applied to the Civil Aviation Authority of China to operate flights on several new routes, according to FlightGlobal.
One of the planned routes due to start early next year is a three-times weekly cargo service between Shanghai Pudong and Chicago, via Anchorage. The Guangzhou-based carrier plans to operate either Boeing 747-400Fs or Boeing 777s on this route, said the administration.
Shanghai Shipping Exchange has launched a new Shanghai (Export) Container Freight Index (SCFI), Xinhua reported.
The index was first developed in 2005 but has been modified to have a starting point of 1,000 based on 16 October 2009 calculations. Freight data is provided by 30 members, and each Friday the exchange will compile and publicise the new SCFI and spot rates of 15 international routes. By showing the market freight rates of individual routes, the index is designed to be more straightforward and understandable to users.
In 1998, the exchange started the China (Export) Container Freight Index, which it claims has since become the most authoritative freight index after the Baltic Dry Bulk Index. Three years later, in 2001, it launched the China (coastal) Bulk Freight Index.
Figures from Chongqing Statistics Bureau showed that the municipality’s GDP reached nearly Rmb380bn during the first three quarters of 2009, up 13.4 per cent over the same period last year. This growth rate ranked it fifth nationwide, behind only Inner Mongolia, Tianjin, Guangxi and Sichuan. National average economic growth for the first three quarters was 7.7 per cent.
Chongqing’s industrial value-added reached nearly Rmb150bn, up 14.8 per cent year-on-year and accounting for more than 40 per cent of GDP. Consumer retail sales and value-added from the real estate sector, which grew 22 per cent and 15.3 per cent respectively, also contributed significantly to GDP growth.
According to Chongqing Development and Reform Commission, the scheme to subsidise electric domestic appliances for farmers has proved to be a huge success. By 30 September, more than 1m units were sold, totalling nearly Rmb2.1bn, ranking if first in the country.
China’s largest dry bulk carrier capable of sailing on both river and sea has been built by Jinling Shipyard in Nanjing. The shipyard is part of Sinotrans Yangtze National Shipping Corp, the largest barge operator on the Yangtze.
The 92,500 dwt vessel is the biggest that the shipyard has ever built, measuring 229.2 metres in length, 38 metres wide and 48 metres high, with a draught of 14.9 metres.
On 26 October, heavy fog enveloped the Yangtze lower reaches, with visibility reduced to just 100-200 metres in places. More than 2,500 vessels were stranded in the Nanjing and Zhenjiang areas.
The heavy fog also closed some of the busiest expressways in Nantong, Nanjing and other parts of Jiangsu province. By 11am, Nanjing airport had postponed or cancelled eight scheduled flights from Chengdu, Xiamen, Shenzhen, Kunming, Beijing and Guiyang.
Further inland, Chongqing airport was shut down on the same day due to heavy fog. More than 10,000 passengers were unable to travel to, or depart the city.
The Yangtze Waterway Bureau has finished compiling digital maps of the entire Yangtze River, according to the director of its waterway division Wan Dabing. Work started in 2008 on the upper and lower reaches. By mid October, the remaining 2,000km or so of waterway in the middle reaches had been digitally mapped. Once the ongoing quality control process is completed, digital mapping will be available for use on vessels.
Digital mapping is an important part of the ambitious Digital Waterway programme, itself a key element in the modernisation of the Yangtze. Vessels equipped with the digital mapping system will be able to download the latest data of the waterway, including water levels, water depths, hazards, port and terminal locations, bridges and mooring areas. The initiative is designed to improve the efficiency and safety of shipping on the Yangtze.
The Three Gorges Dam started releasing water earlier than scheduled to combat a worsening drought in the Yangtze. According to officials from the dam, at 4pm on 25 October, water was released at a rate of 9,160 cubic metres per second.
The middle reaches of the Yangtze have seen little rain since August. As a result, water levels have been reduced to their lowest level in 20 years, both on the trunkline and on major tributaries such as Dongting and Boyang lakes. The dry season, which usually starts in October, has effectively arrived 40 days early.
In the lower reaches, Jiujiang, Anqing, Wuhu and Nanjing are suffering from their lowest water levels since 1986. In Wuhu, at 8am on 22 October, the water level was just 2 metres, a full 1.7 metres lower than at the same time last year.
The water level at the dam was 170.52 metres at 5pm on 25 October, 11cm higher than on the previous day. The water is scheduled to reach a level of 175 metres for the first time this year. There is no indication yet whether the current increased volume of released water would affect the realisation of this target.
Construction of the Chongqing section of the Lanzhou-Chongqing railway started on 17 October. When built, it will take just four hours to travel by train from Chongqing to Lanzhou in Gansu province.
Elsewhere in Chongqing municipality, the Yangjiao Wujiang River Bridge in Wulong was officially opened to traffic on 18 October. The bridge is 318 metres long and has a main span of 170 metres.
The world’s largest tunnel-bridge structure, linking Shanghai with two of its major islands, will be open to traffic at the end of this month, reported China Daily.
The Yangtze River Tunnel-Bridge and connecting expressway will shorten travel to Changxing Island, northeast of the Shanghai mainland, from about 30 minutes to 10 minutes. Travel from Changxing to Chongming Island will take 20 minutes instead of one hour, according to Huang Rong, director of the city’s construction commission.
Currently, the only way to travel to the two islands is by ferry, and services are often suspended in bad weather.
Once the expressway opens on 31 October, a ride from downtown to Chongming Island will be halved to a little more than one hour, Mr Huang said.
Until now, the islands’ development has lagged far behind central Shanghai, partly because of poor transport facilities. Furthermore, with a bridge being constructed to connect Chongming Island to Qidong in Jiangsu province, the tunnel-bridge will eventually serve as a fast link to northern Jiangsu.
On 16 October, drilling work began in Wuhan, Hubei province, on China’s first metro tunnel under the Yangtze River, according to local officials. It could go as deep as 60 metres under the water.
The 3.1km tunnel will be located between the Wuhan Yangtze River Bridge and the city’s first road tunnel under the river. It will form part of Wuhan’s 28km-long No.2 metro line, due to be completed in 2012. Some Rmb14.9bn will be spent on building the line, which is expected to take half of the public transport volume crossing the river and thus alleviate what is currently a major traffic bottleneck.
Wuhan’s first road tunnel opened for traffic last December. Another two road tunnels under the Yangtze River, in Shanghai and Nanjing, are expected to open for traffic at the end of this year and in July 2010, respectively.
Cofco, the major shareholder of dairy company Mengniu, has announced that production has begun at Mengniu’s manufacturing base in Meishan, Sichuan province. With an initial investment of Rmb300m, the new base is designed to process 800 tons of raw milk daily and will achieve an annual output of Rmb1.2bn.
Cofco also said that Hongya Modern Pasture, which will provide dairy resources to the Mengniu Meishan plant, was completed at the same time as the manufacturing base. This farm currently raises more than 5,000 cows that have been imported from Australia.
Cofco is the largest oils and food importer and exporter in China and a leading food manufacturer.
Construction of the Yunnan-Asean International Cold Chain Logistics Centre is to begin next month in the Yunnan provincial capital of Kunming, reported Logistics Week. The facility is designed to offer cold chain logistics services for agricultural produce traded between Yunnan and Asean countries. When completed in November 2010, it will become the largest facility of its kind in southwestern China.
The Rmb600m project will have a storage capacity of 100,000 tonnes and cover 13 hectares.
Yunnan province is an important producer of fruit and vegetables, coffee, fresh cut flowers and tea.
FedEx Express has announced an improvement to its inbound international express service in China that will involve parcels from around the world being delivered in Shanghai by noon, six hours earlier than the previous commitment of 6:00pm.
The new delivery time applies to all inbound FedEx International Priority service shipments to most areas of Shanghai from Monday to Saturday, with a money-back guarantee.
China has begun to resettle 330,000 people to make way for construction of a water transportation project that will divert water from the Yangtze River to Beijing, according to official media.
People from Henan and Hubei provinces are being moved out of the way for the central one of three planned routes that will carry water to arid northern China. Water is expected to flow from the Yangtze and its tributaries to Beijing in 2014 along the central route.
Those affected include residents living near the soon-to-be enlarged Danjiangkou reservoir, where a sluice is being built to divert water from the Yangtze and its tributaries.
The Ministry of Railways will start issuing the second lot of China Railway Construction Bonds worth a total of Rmb20bn on 22-23 October. There are two types of bonds, a 10-year bond worth Rmb15bn and a 15-year bond worth Rmb5bn.
Only one month ago, the first tranche construction of bonds was issued worth a total of Rmb30bn.
Statistics from Chongqing municipal government revealed a 52 per cent year-on-year increase to Rmb76.2bn in utilised domestic investment in the first three-quarters of 2009. The most popular investment destinations were in the north-eastern part of Chongqing, including the districts of Nan’an, Yubei and Shapingba.
The majority of domestic investors, 79 per cent, came from the coastal region. Investment from Guangdong province topped the list, increasing 97 per cent to Rmb15.7bn. Investment from Beijing rose by 33 per cent to Rmb13.6bn, while investment from Zhejiang province totalled Rmb9.4bn, an increase of 47.5 per cent.
The Yangtze Waterway Bureau organised a successful demonstration on 14 October of the digital mapping of Wuhan port. Experts from the Yangtze River Administration, the Yangtze Waterway Bureau and Sinotrans Yangtze Shipping Corp boarded a vessel and followed the digital map. They concluded that the shorelines, buoy positions, vessel location and other information were accurate and easy to follow, and satisfied the need to help vessel operators chart their journeys.
This is part of an ambitious programme to build a digital network for the entire waterway, 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. By the end of 2010, the authorities hope to have built a framework for the digital waterway and to have started trial runs on some sections of the Yangtze.
A major maintenance project began on 15 October on the No.3 shiplock of Gezhouba Dam, 38km downstream of the Three Gorges Dam. Such work happens once every six years.
Between 22 November and 5 February 2010, the operation of the No.3 shiplock will be suspended. Maintenance will be carried out on a number of items such as machinery and water works, and is scheduled to be completed by the end of May 2010.
The Ministry of Transport has recently issued a circular that allows domestic shipping companies to purchase ‘abandoned’ vessels (except passenger cruises) for use on domestic routes, after the new capacity is registered with the relevant authorities.
The measure refers specifically to those vessels that were started to be constructed before 31 March 2009. Due to the worldwide economic downturn, many ship owners cancelled their orders so as to cut losses.
This new measure, effective until the end of 2010, is designed to help shipyards deal with the issue of abandoned vessels.
Sichuan plans to spend Rmb82.5bn on 137 projects in the natural gas, chemicals and petrochemicals sectors, said Zhang Yushan, deputy director of the province’s Economic Commission.
In 2008, Sichuan’s sales revenues in the petrochemicals industry increased 25 per cent year-on-year to Rmb97.9bn. This is expected to increase to Rmb157bn in 2011, of which Hongda Group will contribute Rmb30bn. Sichuan Chemical Works Group is expected to account for Rmb20bn and Yibin Tianyuan Group will generate revenues of Rmb10bn.
Sichuan has abundant natural gas reserves.
Carrefour, the France-based retailer, will spend more than Rmb100m on buying fruit and vegetables in Chongqing next year, according to Eric Legros, chief executive of the company’s China operation. This is up from Rmb40m currently, which accounts for 30 per cent of all the fresh produce sold in Carrefour’s supermarkets in Chongqing.
Carrefour will set up a local purchase team in Chongqing. In addition to sourcing more products from the municipality, the staff will offer training to local farmers in agricultural technology, fertiliser usage and food security.
Carrefour currently has four supermarkets in Chongqing and a fifth is due to open in Yuanjiagang this month. In 2010, there will be a new Carrefour store in the Nanping area.
China’s railways carried 54.5m passengers over the busy National Day holiday period between 1-7 October, according to the Ministry of Railway. A total of 284 trains were added on 7 October as millions of people made their way home or to their place of work.
Prior to the start of the holidays, the Ministry of Transport predicted that 488m journeys would be made on the roads between 1-8 October, up 6.8 per cent over the same period last year.
This year’s holiday was extended by one day to accommodate the Mid-Autumn festival, which fell during this period.
Damco, formerly known as Maersk Logistics, has recently decided to set up an operation in Chengdu rather than Chongqing. The wider customer base in the Sichuan capital was cited as the main reason, according to a reliable source. The more professional way that Chengdu government conducts business in general was said to be another important factor. Damco already had a business licence until now it has never been used. The company plans to develop the new operation as a regional hub for the foreseeable future.
Chongqing has established a fund to develop its logistics industry, Xinhua reported. The city government plans to spend Rmb200m a year subsidising its major logistics operations and addressing the weakest links in the sector.
In competition with Chengdu, Chongqing hopes to become the logistics hub for southwestern China. In order to achieve this goal, the city will spend Rmb164.3bn on 175 logistics projects.
China plans to invest Rmb469bn in infrastructure projects to boost the development of the country’s western regions in 2009, said the National Development and Reform Commission (NDRC). The investment will go to 18 projects, in sectors such as railways, expressways, hydropower stations, ports, water control and airports. One such project to start this year is the 345km-long Chongqing-Guiyang high-speed railway, which will allow a top speed of 250kph. Another is an expansion project of Chengdu Shuangliu airport.
Between 2000 and 2008, China launched 102 projects aimed at boosting the west, at a cost of Rmb1,740bn, according to the NDRC.
The West Development Strategy is the Chinese government’s main policy to reduce the growing gap between the underdeveloped western region and the more prosperous east.
Wallenius Wilhelmsen Logistics is to increase the number of its sailings on the Japan-South Korea-China RoRo service to three a month. This is because of what the company sees as an upturn in trade between the three countries in vehicles, rolling equipment and non-containerised cargo.
Sailings are being offered from the Japanese ports of Kobe, Nagoya, Toyohashi, Gamagori, Hitachinaka and Yokohama to Pusan and Inchon in South Korea and then on to Tianjin, Shanghai and Guangzhou in China.
WWL, which inaugurated the service in 2004, is dedicating three RoRo vessels to the service. All of them are designed to carry cars, buses and trucks, in addition to high and heavy loads, including construction and agricultural equipment, and break bulk cargoes.
The operators of the main international airports in Shanghai and Hong Kong are to form a joint venture to manage Shanghai Hongqiao International Airport, reported China Daily. Despite its full name, Hongqiao mostly handles domestic flights.
Shanghai Airport will pay Rmb51m for a 51 per cent stake in the venture, with Hong Kong Airport Authority paying Rmb49m for the remainder.
Han Zheng, mayor of Shanghai, said that cooperation between these two experienced operators should lead to a more sophisticated service at Hongqiao, enabling it become a more competitive airport.
Hongqiao is building a new terminal that is scheduled to be completed next year. The airport aims to carry 30m passengers and 1m tons of cargo annually by 2015. This compares with 22.9m passengers and 415,700 tons of cargo in 2008.
The Yangtze River Administration and the Salvation Bureau, both under the Ministry of Transport, signed an agreement on 12 October to set up an emergency salvation system. According to the agreement, both parties will respond to major accidents with one voice and under one leadership.
Senior officials within the agencies will meet regularly and in times of emergency. The Salvation Bureau will also help train divers for the Yangtze River Administration. The bureau is based in Beijing, while the administration is located in Wuhan.
SIPG Jiujiang port recorded a September throughput of 10,034 teu, its largest-ever single month total. For the first nine months of 2009, container throughput totalled 65,000 teu, up 108 per cent year-on-year.
The worldwide economic downturn did affect the port at the beginning of this year. However, the senior management’s decision to tie up with Nanchang port, a much smaller port on the Yangtze tributary the Ganjiang, has increased the number of regular calls from 20 a week to a dozen a day. As a result, Jiujiang’s container traffic has increased significantly.
China Shipping Container Lines has announced peak season surcharges and rate increases on most of its major trade lanes, according to Exim News Service.
A peak season surcharge for shipments on Asia-European/Mediterranean lines of US$ 200 per TEU has been in effect since the start of September. From 1 October, the emergency bunker surcharge has been raised to US$200 per TEU.
At the same time, China Shipping has also announced a rate increase from the Far East to the US east coast of US$50 per FEU. For cargo bound for the US west coast, the increase will be US$150 per FEU.
Peak season surcharges have also been announced for cargo to South and Central America, Australia, the Middle East and Africa.
Guiyang, capital of southwest Guizhou province, started the construction of an urban railway network on 29 September, reported China Daily.
The Rmb18.9bn network will connect nine logistic centres around the city. Central to the four-year plan is the construction of an urban high-sped railway, with 259km of line to be built.
In late September, Guiyang opened its first highway that encircles the city. It is 121km long and gives the city the potential to vastly expand its urban area and double its population of 3.6m, according to Li Jun, secretary of Guiyang’s Communist Party Committee.
China’s railways carried a record of 6.93m people on National Day on 1 October, according to the Ministry of Railways. The previous record was set a year ago when the railways carried 6.48m passengers on 5 October.
This year, the National Day holidays coincided with the Mid-Autumn Festival, meaning that more people working a long distance from home decided to return for family re-unions in the eight-day holiday period.
Construction has begun in northern Shanxi province on China’s first railway involving private funds.
The railway is co-funded by the Broad Union Investment Management Group, Yufeng Railway Construction Investment and the Railway Bureau of Zhengzhou.
The 64km line connects Jiafeng township and Nanchenpu in the city of Jincheng. It is expected to cost Rmb2.3bn and will take three years to build.
Jincheng is a major coal-producing area and the line is intended to help develop the industry.
Transport authorities in Jiangsu have announced a plan to rename all its national and provincial expressways as part of a nationwide effort to standardise the names of all expressways. Work will start in November and is due to finish by June next year. All national expressways will start with G (as in Guodao) and provincial expressways will start with S (as in Shengdao).
According to the provincial plan, by 2015 Jiangsu will have 46 expressways totalling 5,200km. Fourteen of them will be national expressways totalling 2,900km, and the remaining 32 will be provincial ones totalling 2,300km.
The Taiwan-headquartered Taibo Group is to set up the world’s largest soda plant in Huaian, in the north of Jiangsu province. Construction started on 29 September.
Taibo is one of the world’s largest glass manufacturers. According to the group’s chairman Lin Boshi, the US$1.14bn project aims to utilise the area’s rich reserves of salt mines. Scheduled to be completed within three years, it is expected to generate annual revenues of Rmb3bn. Its vacuum salt facility with an annual capability of 1.2m tons and its alkali facility with an annual capacity of 1m tons will be the largest in the world.
Until now, Taiwanese manufacturers have tended to cluster in southern Jiangsu cities, such as Suzhou and Kunshan; the northern half of the province has been less successful in attracting investors. However, a number of Taiwan companies have started to establish operations in northern Jiangsu, including Foxconn, Darfon, Hongsheng, Wangwang and Master Kong.
On 29 September an inaugural container service was completed on the direct route between the ports of Taicang in Jiangsu province and Incheon in South Korea. The vessel Linyuan has a 614 teu capacity.
Taicang has already been operating a route to another major Korean port, Busan. According to China News Service, Taicang operates 72 services on five near ocean routes, linking the city to Korea, Japan, Taiwan and Africa. The Yangtze port aims to become a regional hub for domestic trade and a transhipment centre for export cargo.
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