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Shenzhen seeks free port despite calls against

(China Daily)
Updated: 2006-11-25 08:50

This southern coastal city said it is looking to turn its bonded logistics zone into a free port, despite reports that authorities were calling to suspend the approval of such ports.

"We are actively preparing the materials and plan to submit them to the provincial authority soon, with the final decision in the hands of the central government," said Li Zongjie, spokesman of the Shenzhen Administration Bureau of Bonded Zone.

Shenzhen is launching the plan despite media reports that a number of top authorities suggested suspending the approval of new free ports in a bid to ensure the healthy development of existing bonded logistics zones.

"It makes no sense that the country would stop approving new free ports as long as the conditions are ripe, new free ports are possible," said Zhou Tianlin, director of the Shenzhen Port & Shipping Administration Department, a division of the Shenzhen Port Administration.

If the application is approved, Yantian would be the fourth free port on the mainland. The current three are Yangshan free port of East China's Shanghai, Dongjiang free port of North China's Tianjin and the newly approved Dayao Bay free port of Northeast China's Dalian.

Yantian port, the mainland's No 1 single container terminal, handled about 6 million TEUs (twenty-foot equivalent units) in the first nine months of this year, accounting for 44.7 per cent of total container throughput of Shenzhen ports.

Compared with the country's three free ports, all of which are quite new, Yantian has a strong position in the country, Zhou said.

It was among the second group of seven pilot bonded zones on the Chinese mainland, following Waigaoqiao of Shanghai, to get permission to carry out "port-zone interaction," the first step to becoming a free port, in mid-2004.

A free port would mean earlier rebates for exporters, Zhou said.

Another advantage would be a reduction in costs for shipping companies thanks to easier container loading.

Industrial experts said Shenzhen is qualified to become a free port, but they doubted whether the upgrade could have a real impact on the growth of the ports.

"It will make no difference if you go from the previous port-zone interaction to a free port if the latter can't launch free currency exchanges and opener financial arrangements," said Wang Guowen, a senior researcher with China Development Institute, a leading policy consultancy company.

If Shenzhen could have a real free port, such as Hong Kong, it could work together with Hong Kong to compete with other Asian ports, including Pusan of South Korean and Singapore, Wang noted.

Both Zhou and Wang forecast cargo and container throughput handled by Shenzhen ports will rise thanks to booming foreign trade in the Pearl River Delta.

"Shenzhen ports will keep growing, though growth rates will slow given the bigger base," Zhou said. "Meanwhile, the value of every container is expected to rise since more costly products such as electronics components are replacing goods with low added value such as shoes and toys."

Wang said Shenzhen ports will remain very busy in the next two to three years.

But with the operation of new ports and new berths, bottlenecks may be reduced in a decade, he said.