China steps up bid for port integration, reorganization

- Sep 06, 2019-

Moves designed to enhance earnings ability, diversify development models

Just five minutes away by cargo train from one of Dalian Port's container terminals in Northeast China's Liaoning province, crane operators are busy unloading containers shipped from Japan and South Korea, and transferring them to a freight train that will depart for Moscow in two days.

"Sea routes combined with railway transportation will further cut costs and transportation times. These fully loaded containers leaving Dalian Port will arrive in Moscow in just one-third of the time that traditional waterways take," said Xia Ting, manager at the business development department of Dalian Port, a subsidiary of the newly founded Liaoning Port Group.

With trade links to more than 300 ports in over 160 countries and regions, Liaoning Port Group and its partner Russian Railways are currently investing and building a logistics center outside Moscow, which is expected to be operational by the end of 2020.

With the business starting in January, the establishment of Liaoning Port Group is a typical example of the country's intensified efforts to integrate the nation's ports and diversify their business development model to enhance their earning ability via measures such as sea-rail transport, intelligent port development and further expanding connectivity with markets related to the Belt and Road Initiative.

As shipping is a lifeline of global trade and ports play a key role in regional development, the government is expected to release the guideline for building world-class ports across the country to support China's foreign trade and service businesses this year, according to a report by Beijing-based Economic Information Daily.

Among them, the integration of regional ports has become one of the notable trends, as the recent pace of port reorganization and integration in Tianjin municipality, and Shandong and Jiangxi provinces has either implemented or accelerated, indicating more port conglomerates may emerge sooner or later.

Because China currently is in the process of building a modern economic system and pushing its industries to move toward the quality development stage of the global value chain, well-connected and efficient container ports enabled by busy shipping activities are critical in cutting trade costs and facilitating sustainable development, said Lu Chengyun, an assistant researcher at the Institute of Transportation Research at the National Development and Reform Commission.

As an infrastructure industry, Lu said the development level of a port needs to adapt to economic and industrial development in different stages, as well as consider measurement indicators including throughput capacity, economic contribution rate, business environment and green development.

East China's Shandong established Shandong Port Group last month in Qingdao by integrating major ports in the province, including Qingdao Port, Yantai Port, Rizhao Port and the Bohai Bay Port Group.