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March 2010 Wuhan’s Deputy Communist Party Secretary Mr Tu Yong visited some of the most popular rural tourist spots in the city’s administrative area on 29 March and called on local tourism officials to seize the opportunity brought on by the new Wuhan-Guangzhou high -speed railway and develop rural tourism into a thriving new industry.
The high-speed passenger rail line, which started operation on 26 December 2009 after four-and-a-half years of construction, has reduced the journey time between the two cities from 11 hours to just under three hours.
More than 20 travel agencies in Wuhan attended an international tourism trade fair in Guangzhou between 24 and 26 March in an effort to attract more tourists on the back of the new railway line. In recent years, rural tours in Wuhan, which involve staying at a farmer’s home, have been gaining in popularity. Last year alone, the number of people going on such tours to Wuhan exceeded 10m, bringing total revenue of more than Rmb1.5bn, up 18.4 per cent year-on-year.
From 1 April, Chongqing municipal government is to issue emission-based licences to vehicles according to how environmentally-friendly they are. Vehicles without these licences will not be allowed on the road.
Car ownership in Chongqing has been increasing by 20 per cent annually over the past few years. By 2009, the number of vehicles on the road in the municipality exceeded 2m, their emissions presenting a major health hazard to the local population.
There will be two colour-coded licences, one yellow for low emissions and the other green for standard allowable emissions. The city’s transport authorities said that they plan ways to promote the low-emission yellow licence by restricting the areas that green-licensed vehicles can travel in the city proper.
Vehicles coming into Chongqing with their own eco-licences can exchange them for the local version or obtain the local version by undergoing a test. Vehicles passing Chongqing without eco-licences need to obtain licences if they stay in the city for more than seven days.
Damco, the logistics arm of A.P. Moller-Maersk Group, has officially opened its new customer service office in Chengdu, Sichuan province. The office is shared with Maersk Global Service Centres, which provides back office functions for businesses owned by the parent company. Between them, the two companies will initially employ more than 1,000 staff in Chengdu.
Apart from centralising customer services, the move is also expected to reduce business costs, said Steffen Christensen, Damco’s North Asia CEO.
Sinopec has starting to pump gas through the Sichuan-Shanghai natural gas pipeline, reported Xinhua. The Rmb63bn pipeline is designed to carry 12bn cubic metres of natural gas a year to Shanghai from Puguang, China’s second largest gas field, in Sichuan province.
The 1,700km pipeline crosses eight provinces or municipalities, including Chongqing, Zhejiang and Hubei, and it will serve Shanghai and other areas along its route.
Russian carrier Aeroflot has resumed flying a full freighter schedule after regaining traffic rights from the Chinese authorities, reported International Freighting Weekly.
Since December, the airline has been operating a much-reduced service as a result of financial pressures. Industry sources quoted by the magazine said Aeroflot had been operating between four and six flights a week to Asia from its European hub at Hahn in Germany for most of this year.
However, this has now been increased to a full programme of 10 flights a week, including services to Shanghai, Beijing and Hong Kong, which had all been dropped from its schedule this year.
The popularity of high-speed train services between Zhengzhou and Xian has led to the postponement of air services between the two cities just seven weeks after the line opened, reported Xinhua.
Joy Air, one of the airlines offering services on the route, said it had managed to sell an average of 63 per cent of air tickets on the Zhengzhou-Xian daily route until the high-speed railway began operations in February this year.
The 505km railway with a speed of 350 kph was the first high-speed rail line in central and western China. It cut the travel time between the two cities from more than six hours to less than two hours.
This works out much quicker than the 70-minute air journey, taking into account check-in times and connection travel to the city centres.
China’s high-speed railway network will total 13,000km by 2012, according Ministry of Railways plans. By this time, they will impact 60 per cent of China’s domestic air market, according to Liu Chaoyong, general manager of China Eastern Airlines.
Construction work began on 26 March of a high-speed passenger railway between the provincial capitals of Changsha, Hunan province, and Kunming, Yunnan province.
The 1,167km railway will be designed for trains travelling at 250 kph, and will form part of the Shanghai-Kunming Passenger Railway. When the line is completed, travel time between Kunming and Changsha is expected to be reduced to only four hours from currently nearly 23 hours.
“The Changsha-Kunming railway will help improve transport between central and southwest China, and it will also beef up connections between the southwest with the prosperous east coast,” said Chinese Vice Premier Zhang Dejiang.
The soon to be launched The Containership Company has been granted an operating licence in China, reported Seatrade.
The new budget Scandinavian line has also chartered two container ships, one of 2,900 TEU capacity and the other 3,000 TEU. TCC plans to launch its first service between Taicang, Jiangsu province and Los Angeles on 17 April.
Shanghai International Port (Group), the largest port operator in China, booked a net profit of US$150.9m in the fourth quarter of 2009, up 48 per cent from a year earlier, China Knowledge Press reported. SIPG realised a net profit of US$550.7m last year, down 18.6 per cent year-on-year, with turnover falling 8.79 per cent to US$2.4bn.
The company said that its outlook for this year is likely to be better than that of last year because of the improved prospects for global trade. However, it recognised that the recoveries of the US and EU economies are still unstable.
Fu Yuning, president of China Merchants Group, said that statistics from the Ministry of Transport show China’s major ports handled 121m TEU of containers in 2009, down 6 per cent year-on-year. However, he said that the outlook is improving, and he expects throughput could rise to 125m TEU this year.
China has started to build a 67km-long canal from the middle section of the Yangtze River to a tributary that connects with the central route of the country’s south-north water diversion project.
Costing more than Rmb6bn to construct, the project will divert 3.1bn cubic metres of water every year from the Yangtze’s Jingjiang section to the Hanjiang River, a major source of water for north China once the diversion project is complete in 2014.
The water diversion project is designed to divert water from the water-rich south to dry northern cities such as Beijing and Tianjin. The canal is expected to benefit some 8.9m people and 43,000 hectares of farmland in the lower reaches of the Hanjiang.
Once completed, the five to six metres deep canal could be used by 1,000-ton ships, facilitating the transportation of coal from the north to the south, said Xu Shaojun, head of the Hubei Provincial Investigation and Design Institute of Water Resources and Hydropower.
On 31 March, the final lifting movement saw the Taizhou Yangtze Bridge, the world’s tallest tower bridge, reach a height of 192 metres. This means that all the cranes employed to erect the structure have completed their task and can be deployed elsewhere.
The Taizhou Yangtze Bridge will be 62km long, taking into account the approach roads and the bridge structure itself. Work started on the Rmb9.4bn project in 2006, and is scheduled to be completed by 2011. The suspension bridge has three supporting towers and two spans, the first of its kind in the world.
Statistics from the Yangtze River Administration under the Ministry of Transport show that general cargo throughput on the Yangtze trunk line increased by 30 per cent year-on-year in March 2010 to 110m tons. Out of this total, foreign trade-related throughput grew by 11 per cent. Container throughput increased 0.7 per cent to 690,000 TEU.
For the first three months of the year, general cargo throughput went up by 34 per cent compared with the same period last year, while container throughput decreased by 5 per cent to 1.88m TEU.
Chongqing’s foreign trade total in the first two months of 2010 increased 54 per cent year-on-year to US$1.49bn. This was higher than the national average growth rate of 45 per cent.
Mechanical and electrical products including motorcycles were the major export items, accounting for 70 per cent of the city’s total foreign sales in January and February.
SAIC Motor celebrated the start of manufacturing its own-brand cars at its plant in Nanjing, Jiangsu province, when a Roewe 350 compact sedan recently rolled off the assembly line.
The Rmb2.6bn facility will have an annual production capacity of 200,000 cars and 250,000 engines. The Shanghai-listed SAIC will also produce compact models under its MG brand at the Nanjing plant.
SAIC has existing facilities in Shanghai and Yizheng, another city in Jiangsu, to make its own-brand cars. It also has joint ventures with Volkswagen and General Motors.
The group aims to double 2009 sales of its own-brand cars to 180,000 units in 2010, reported China Daily. It plans to launch four new models this year, including a medium-sized sedan, a compact car, a subcompact and a sports utility vehicle.
Tongling Non-Ferrous Metals Group has started building a new copper smelter in Jinchang, Anhui province. In the first phase, the new plant will have an annual capacity of 200,000 tonnes of copper, doubling to 400,000 tonnes in the second phase. This will raise the company’s total refined copper capacity to 1.2m tons a year. The smelter, expected to be fully operational in 2012, will be supplied by the Finnish headquartered metallurgical group Outotec.
Tongling, whose name means ‘copper hill’, is a city located on the southeast bank of the Yangtze River at the foot of the Southern Anhui Mountains.
Track laying on the Shanghai-Nanjing Intercity Railway was completed on 17 March, according to Xinhua. The fine tuning and integration work to follow will last a few months, but officials are optimistic that the line will be ready for service by 1 July.
The 300km line is an important part of the Z-shaped Nanjing-Shanghai-Hangzhou-Ningbo intercity rail project that links four of the most vibrant cities in the Yangtze River Delta. The Shanghai-Nanjing section, running parallel to the existing Shanghai-Nanjing line, will pass cities such as Suzhou, Wuxi and Zhenjiang and will have 21 stops. Construction started in July 2008 and, upon completion, the line will accommodate trains travelling at 350 kph. Its main function is to transport passengers; the existing line will in future be used for freight only.
A high-speed railway line connecting Beijing and Shenyang, the capital of Liaoning province, may start construction in July, according to sources quoted by China Knowledge.
Trains will be able to travel at speeds of up to 350 kph, shortening the trip between the two cities from nearly four hours to two-and-a-half hours.
By the end of 2012, China is expected to have 13,000km of high-speed rail, up from around 3,300km today, according to the Ministry of Railways.
Construction work began on a 308km, high-speed railway linking Chongqing and Chengdu on 22 March, said Wu Yong, director of Chengdu Railway Bureau. The project is scheduled to take four years to complete and, after opening, the journey time between the two cities will be halved from the current two hours.
The mountainous terrain means that two-thirds of the track will be laid on bridges or will pass through tunnels.
Chengdu and Chongqing are the two major cities in China’s southwest, and the high-speed railway is designed to promote regional development.
In addition to the Chengdu line, Chongqing will start constructing another two lines this year, one to Guiyang, capital of Guizhou province, and an intercity line to Wanzhou, elsewhere in Chongqing municipality.
The severe drought in southwest China has worsened over the past two weeks due to continued low rainfall levels, according to Xinhua. Some 18.05m people and 10.17m livestock are short of drinking water and 6.44m hectares of arable land have been affected, said the State Flood Control and Drought Relief Headquarters.
A falling water table and an increasingly busy timetable have led to the cracks appearing in the only runway of Kunming airport in Yunnan province. The runway is now closed for repairs every day from midnight to 7:30am until at least some time in April.
However, the situation in Chongqing appears to have improved, according to a municipal government website. Falling temperatures and recent rainfall have eased severe drought condition in most areas of the municipality.
China’s air passenger throughput amounted to 39.66m in the first two months of 2010, up 14.8 per cent from the same period last year, according to the Civil Aviation Administration of China. Cargo and mail throughput totalled 793,529 tons over the same period, representing a year-on-year increase of 51 per cent.
KLM Royal Dutch Airlines will launch a scheduled service between Amsterdam and Hangzhou Xiaoshan airport from 8 May this year, thereby becoming the first airline to offer a direct connection between Europe and the capital of Zhejiang province.
The new service will depart from Amsterdam’s Schiphol airport every Monday, Wednesday and Saturday, with return flights leaving Hangzhou on each of the following days.
Shanghai’s Hongqiao Airport opened a second terminal on 16 March, two months ahead of the 2010 Expo.
The five-year expansion project, which includes a new 3,300 metre-long runway in addition to the terminal, will boost Hongqiao’s annual handling capacity by an estimated 40m passengers and 1m tons of cargo by 2015.
Until now, Terminal 1 has struggled to cope with increased passenger demand. Designed to handle 9.6m passengers a year, it processed more than 25m in 2009.
Terminal 2 is four times larger than the original terminal, and it will serve 11 domestic carriers and handle three-quarters of Hongqiao’s passenger traffic. Terminal 1 will offer both domestic and international services, including flights to Japan and South Korea. Pudong, on the other side of Shanghai, remains the city’s main international airport.
The new terminal is linked to downtown by Metro Lines 2 and 10. From People’s Square station in central Shanghai, the airport can be reached in about 40 minutes. Free bus services of 15-20 minutes duration operate between Hongqiao’s two terminal buildings.
NYK Logistics has opened a branch in Nanjing, capital of Jiangsu province.
Since establishing its head office in Shanghai n 2000, the Japanese-owned company has set up branches in Tianjin, Qingdao, Xiamen, Guangzhou, Fuzhou, Dalian, Ningbo and Suzhou.
Improved export orders from China have persuaded the shipping line OOCL to partially reinstate some of the capacity it had previously withdrawn from the Asia-North Europe trade.
A new service, jointly operated by various carriers under the Grand Alliance and New World Alliance, began again on 22 March with 10 vessels, each with a capacity of 6,000 TEU.
The port rotation of the new service is: Qingdao, Yangshan, Shekou, Yantian, Singapore, Suez, Port Said, Le Havre, Southampton, Rotterdam, Hamburg, Port Said, Suez, Singapore, Chiwan, Shekou and back to Qingdao in a 70-day round trip.
Watson, the world’s largest health and beauty products retailer, is to build a logistics centre in Wuhan to serve all its stores in central and north-western China. Wholly owned by Hutchison Whampoa, Watson entered the China market in 1992 and opened its first store in Wuhan in May 2004. Today, it has 20 stores in the city, making Wuhan its most important investment destination in the interior.
Over the next two years, the company says it will set up 1,000 stores across the country, equivalent to the combined total it has opened over the past 17 years. Cities in Hubei province will be a priority, according to the company’s Greater China General Manager, Mr Luo Jingren. Over the next three years, Watson will open 19 stores in Hubei province, each with a floor space of 300 sq metres, including nine in Wuhan alone.
The Yangtze Maritime Safety Authority issued a circular on 17 March, announcing a raft of special measures to be adopted during Shanghai Expo 2010, which runs from May to October. The measures include on-the-spot passing permits to be issued to vessels carrying passengers and dangerous cargo, and to those entering a specially designated control zone near the Expo site.
Heads of shipping lines that have committed a safety offence will be forced to take personal responsibility by reporting in person to the relevant safety authorities to explain improvements in safety precautions. The measures will apply to all vessels entering Shanghai waters during the Expo. Shipping lines that plan to enter Shanghai are also advised to apply for special safety inspection by 1 April, or 15 days before their journey begins.
Chongqing’s first light rail train to be made in the city started service on 10 March.
Chongqing will need 5,220 light rail trains with an investment of more than Rmb40bn up to 2050, according to a long-term plan for local rail transit. Five new trains will go into operation this year, so that a total of 27 trains will be in service in the near future. They will run at three-minute intervals during rush hour.
Chongqing municipal government announced on 15 March that the city’s foreign trade volumes in the first two months of the year soared by 54 per cent to nearly US$1.5bn.
Machinery exports increased by 45 per cent to US$600m, accounting for 70 per cent of the city’s export total. Exports of motorcycles alone reached US$190m, more than double that of the same period last year.
Wuhan city government announced on 17 March that ASEAN countries have replaced the US and Hong Kong to become the city’s third largest trading partner, following the EU and Japan.
The trading volume between Wuhan and the ASEAN countries reached nearly US$200m during the first two months of this year, up 166 per cent over the same period last year. Leading export items include machinery, high-tech products, agricultural produce, iron and steel, auto parts and computer monitors. Imports include Thai rice, tropical fruit and snacks.
Several Wuhan-based state-owned conglomerates including China Bridge Corporation have won international tendering contracts and are now involved in infrastructure projects such as building bridges and terminals.
Cargotec has received an order from Yingkou Port Group Corporation for eight Kalmar reachstackers and one empty container handler. The new equipment was ordered in response to an improved business outlook for ports in Liaoning and other provinces in northern China. Three units have already been delivered to Yingkou, with the remainder scheduled to arrive shortly.
The machines are being assembled at Cargotec’s production facility near Shanghai. The plant opened in 2006 to produce Kalmar container handling equipment and was expanded in 2009 to include the assembly of its Hiab loader cranes.
The France-based international logistics company, Gefco, has signed a deal with Air China to block book belly capacity on inbound and outbound flights with the carrier.
Aircargo News said the deal covers Air China’s Shanghai-Frankfurt and Shanghai-Paris routes, the latter of which will be Gefco’s Western European processing hub.
China is investing heavily in its airport infrastructure. According to government data cited by the consultancy China Intelligence Online in a recent report, China will spend about US$20bn on new airport infrastructure over the five years up to 2013. As a result of the expansion, China will have 186 domestic cargo airports, including three large-scale comprehensive hub airports and seven large hub airports.
China’s Ministry of Railways said on 13 March that the new Shanghai-Hangzhou maglev line had obtained official government approval.
The news was immediately followed by fierce debate among many Chinese internet users as to the wisdom of building the new line. Maglev lines are expensive to build and are more efficient running over long distances.
The 31km Shanghai Maglev is the only commercial maglev line in the world, but has suffered low passenger volume and high maintenance costs since it started operation in April 2006. According to local media, the company that operates the Shanghai maglev line makes a loss of Rmb500m-700m each year and has a liability of at least Rmb7bn.
A Ministry of Railways official has said that China has sufficient money to finance the high-speed railway construction programme, reported Xinhua. Yu Bangli, chief economist at the ministry, said the debt-to-asset ratio of high-speed railway projects stood at 52 per cent in 2009, much lower than the level in other countries.
Wang Zhiguo, vice minister of the Ministry of Railways, said private capital is encouraged to invest in the construction of high-speed railways. “Capital from local investment, strategic investors as well as listed companies, accounts for about 30 per cent of the total capital input on railway construction,” he said.
Financial instruments such as securities and bonds are also important fund sources.
China currently has about 3,300km of operational high-speed railways, and it plans to expand the network to 13,000km by 2012, according to the ministry.
The Beijing-Shanghai high-speed railway will begin operation in 2011, a year ahead of schedule, according to Zheng Jian, chief planner of the Ministry of Railways, reported by China Daily.
Wang Zhiguo, vice-minister of railways, said that the new line would cut the journey time between China’s two leading cities to four hours, while services from Beijing to Nanjing would take just three hours. Currently, it takes about 10 hours to travel by train from Beijing to Shanghai and Nanjing.
A high-speed train is now being developed for the line. It is being tested to run at a top speed of 420 kph to guarantee a safe operational speed of 380 kph, Huang Qiang, chief researcher with the China Academy of Railway Sciences told Beijing News.
China Cosco Group, the world’s second largest shipping company by capacity, is considering making investments in foreign iron ore, coal or oil resources in a bid to dilute the financial impact of the volatile the shipping business, the group’s vice-president Zhang Fusheng told China Daily.
Such a diversification leading to Cosco becoming both a cargo- and ship-owner could significantly reduce its risks. Coal and iron ore are best suited to Cape and Panamax vessels, the two main ship types operated by the company, according to Citic Securities.
The group as a whole made a profit of Rmb600m in 2009, but its main activity of shipping posted significant losses due to the global economic downturn, Zhang said.
The possible investment in mineral resources is part of a wide-ranging restructuring planned by the carrier. It will also devote more resources to developing land logistics, a strong financial performer for the group last year. Currently, more than 90 per cent of Cosco’s business is derived from international shipping, according to Zhang. In future, he said there would be a greater focus on domestic shipping, including costal shipping and inland water transportation.
Westbound container rates on the China-North Europe trade lanes have risen by as much as 50 per cent over the past six months, according to data from shipping sources compiled by Cargonews Asia. In March, carriers have been achieving a spot rate of US$3,700 per TEU compared with $2,500 per TEU in October 2009, according to the article.
Year-long contract rates fixed by carriers in January and February 2010 for the westbound China-Europe trade were reported to be 200 per cent higher than the levels achieved at the same time last year. In the lead-up to the Chinese New Year, capacity utilisation was around 85-90 per cent on this route, prompting some carriers to launch new services or restart those that had been mothballed.
Cosco may begin to buy new or second-hand vessels this year to take advantage of the improved outlook, said the president of its holding company, Zhang Lian. However, he added that the carrier may delay some ship orders to ensure ‘sustainable’ fleet development.
China’s exports have improved since the world economic downturn led to a 20 per cent fall in outbound volumes in the second half of 2009.
The Yangtze Waterway Bureau has begun Yangtze digital mapping trials by giving away 12 sets of software and hardware relating to programme. Companies that have received the free equipment include Sino Yangtze National Shipping Line, Minsheng Shipping and Wuhan Renovation Shipping. The Yangtze Waterway Bureau helped install the equipment and supplied initial training.
Once the external trial is finished, the bureau aims to promote digital mapping across the entire navigable length of the river.
Luzhou is suffering its worst drought in 100 years, according to the Yangtze River Waterway Bureau. Several 100 teu vessels were unable to enter Luzhou Container Port and became stranded in nearby Chongqing. Six weekly services from Luzhou have been cancelled. If the drought continues, officials warn there is a real danger that shipping in the upper reaches could come to a halt.
Sichuan provincial government has ordered the emergency release of water from the Ertan hydropower station upstream. The water level has increased slightly as a result, but shipping conditions remain extremely poor.
From 1 July, a new regulation from the Ministry of Transport will take effect that will withdraw non-standardised Ro-Ro vessels from the Three Gorges Reservoir on a compulsory basis. The regulation will affect 69 vessels, equivalent to 60 per cent of Ro-Ro shipping capacity in the reservoir area.
Ro-Ro services have been flourishing over recent years between Chongqing and Yichang, recording growth rates of 35-50 per cent a year. Loaded trucks board vessels in Chongqing and disembark in Yichang, just before the Three Gorges shiplocks.
In a separate development, shipping companies offering Ro-Ro services are in talks with the Yangtze River Administration to look at the possibility of extending their Ro-Ro service licence beyond the shiplocks.
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.
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