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Helmsman with global ambitions for Tianjin

By Wang Yu (China Daily)
Updated: 2009-02-16 07:57

Less ships anchoring and setting sail means fewer trade transactions.

Without doubt, the logistics business has been hit hard by the ongoing economic downturn. However, the helmsman of Tianjin Port is expecting business to rebound before the downstream economy hits the bottom.

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"The economic meltdown is negatively affecting downstream industries and is causing a ripple effect in the upstream side. The price of raw materials is dropping, and related exports are sluggish," Yu Rumin, chairman of Tianjin Port (Group) Co Ltd, told China Business Weekly.

Of course, the worsening situation may end if downstream businesses can recover soon, giving the logistics sector a shot in the arm, Yu contended.

Since the economic hinterland of Tianjin Port is not so developed in terms of low-value-added industries and not as export-oriented or export-dependent as the Pearl River Delta region, the business of Tianjin Port has been less severely impacted by the economic crisis.

Last year, Tianjin Port met its targets for annual container throughput of 8.5 million twenty-foot equivalent units (TEUs) and cargo throughput of 350 million tons.

Despite the current economic woes, Tianjin Port is setting its sights this year on a cargo throughput of 400 million tons.

"We will do everything we can to maintain growth. Offering better services and stimulating domestic demand are two ways to do this," Yu stressed.

This year, Tianjin Port plans to set up six more water-free ports in inland China to expand its services and footprint nationwide.

With the six new water-free ports, Tianjin Port's services and functions can be further extended across the nation. And demand for logistics services in inland areas can be further spurred by these water-free ports, Yu added.

So far, Tianjin has built 10 inland water-free ports by cooperating with several inland provinces, regions and cities, such as Beijing, Shijiazhuang, Henan province, Ningxia Hui autonomous region, and Baotou and Dezhou cities. Through this approach, Tianjin Port extends port functions to inland areas and shares its advantages with them.

In addition to setting up more water-free ports, Tianjin is stepping up construction and developing more functions at its Dongjiang Bonded Port Area to create a better trading environment for clients, said Ou Yonglin, a spokesman for Tianjin Port.

The Dongjiang Bonded Port Area will cover 10 sq km, becoming the largest in China. Occupying 4 sq km, the first phase of the bonded port area has started operations. It draws on the experiences of international free trade zones, offering international transfer, global distribution, international procurement, international trade transit and export processing.

Priority will be attached at Dongjiang to modern logistics, import-export processing, the manufacturing industry and various service industries.

"During bad times for the economy when everyone is looking for ways to cut costs, Dongjiang may emerge as a perfect place for investment and business operation with its preferential taxation and operation policies," Yang Zhongqiang, vice-chairman of Tianjin Dongjiang Free Trade Port Zone, also known as Dongjiang Bonded Port Area, told China Business Weekly.

Dongjiang Bonded Port Area has already attracted 6.4 billion yuan in investment, demonstrating the attractiveness of this area to logistics and manufacturing enterprises.

"Our policy is to gear up the construction of a cost-efficient platform in these current difficult times, and be prepared for the next wave of development," Yang stressed.

The services offered at Dongjiang can help trim costs for overseas enterprises entering the Chinese market, while helping Chinese businesspeople figure out cost-efficient ways to go global.

"We are offering a platform for Chinese capital to tap the international market. More importantly, the platform is expected to serve as a bridge for Chinese and overseas enterprises to exchange what they want," Yang elaborated.

Dongjiang Bonded Port Area combines the functions of bonded area, an export-processing area and a bonded logistics area.

It is entitled to enjoy all policies for development areas, bonded areas and hi-tech industrial parks. Meanwhile, it can also take full advantage of national preferential policies in terms of tax, port supervision and foreign exchange management.

Tianjin Mayor Huang Xinguo pointed to the important role of Dongjiang Port Bonded Area in his report to the second session of the 15th Tianjin municipal people's congress.

A special ship registration format will be tested within Dongjiang Port Bonded Area, and offshore financial operations may begin on a trial basis later in Dongjiang this year, Huang said.

The bonded area is now searching for a leading project, which can boost regional and national development, Yang said.

In the long run, the bonded area will boast a gross domestic product (GDP) of 57 billion yuan, with investment exceeding 30 billion yuan.

These targets have been set for 2020, but it is very likely that they can be achieved sooner, according to Yang.