Great leap forward
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11/16/2001
According to Shanghai's development blueprint, the city will become a hub for the flow of domestic and overseas commodities, information, capital and talent. Shanghai has listed modern logistics as one of the four priority industries in its 10th Five- Year Plan (2001-05). Officials say developing modern logistics is an important strategic goal in upgrading Shanghai's industrial base. Waigaoqiao Free Trade Zone (FTZ) is the pioneer effort in reaching this goal. As China's first FTZ, Waigaoqiao FTZ has the largest land area and fastest development pace. Over 60 countries and regions have invested in over 4,800 projects in Waigaoqiao FTZ, with a total investment of more than $6.3 billion. A large number of domestic and overseas businesses engaged in international trade, high-tech exporting, warehousing and logistics have settled in the zone. They include 70 of the top 500 translational companies, over 3,000 trading companies, and more than 500 warehousing and logistics enterprises. From January to September this year, added value in the zone increased by 35.5 per cent over the same period last year. Foreign trade value reached US$6.55 billion, US$2 billion of which was exports, up 21.8 per cent and 68 per cent respectively. Sales of distribution businesses in the zone amounted to 16 billion yuan (US$1.9 billion), up 28.8 per cent. "The statistics fully explain the growth potential of Waigaoqiao FTZ and the surrounding area," said Hu Wei, chairman of the Waigaoqiao FTZ Administration. Qian Yongchang, chairman of the State Logistics Association of China, said the geographic location and mature infrastructure facilities provide Waigaoqiao with vast access to the hinterland and the outside world. Favourable policies and service environment in line with international practices have shaped a sound industrial foundation, Qian said. Waigaoqiao FTZ has pledged to establish itself as a logistics centre in the Asia Pacific region to accommodate the expected trade increase now that China has joined the World Trade Organization. A total of 10 billion yuan ($1. 2 billion) will be injected into the construction of a transport platform, an information platform and a policy platform centering on guidance, co-ordination, regulation and support, said Vice- Mayor Zhou Yupeng. Intermediary and service organizations will be brought in to mature the market environment of the logistics, he said at the Symposium on International Logistics Development in Shanghai Waigaoqiao Free Trade Zone. "It will fully tap the geographical and policy advantages of the seaport, airport and infoport. It will be a pilot base to adopt international norms," he said. According to Zhou, the cargo flow of Waigaoqiao Free Trade Zone will amount to 20 million tons by 2010. The annual value of exports and imports will hit US$40 billion, and the added value of the logistics industry will amount to 50 per cent of the total economic added value of Waigaoqiao FTZ. "By then, Waigaoqiao will be built into a purchasing, distribution and transfer centre in the Asia Pacific region, completing the Waigaoqiao Modern International Logistics Base," Hu said. Waigaoqiao aims to attract 10 shipping companies, 20 third-party logistics providers and 100 self-operated logistic arms of multinationals by 2005. These numbers are expected to double by 2010. "The implementation of logistics management in China lags behind trade growth as well as China's major competitors," said Peter Lee, president of P&O Nedlloyd Logistics (China) Ltd. "There is a lot that Waigaoqiao should do and could do if it intends to compete as a free port," said A. J. Russchen, an official with Rotterdam Harbour Representative Office in Shanghai. He made several suggestions for Waigaoqiao FTZ according to Rotterdam's experience. It needs to strengthen inland transportation by facilitating other transportation means. To enable more transportation providers to conduct business in Shanghai is another step the city should take, which will increase local competition in the long term, he said. He stressed the importance of facilitating training of logistics experts and introduction of new logistics concepts through co-operation.
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