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Quality comes first for port growth
By Ding Qingfen (China Daily)
Updated: 2009-02-16 07:57

Upgrading campaign

Chinese ports went on an expansion spree between 2001 and 2007 to cater to the ballooning foreign trade volume, with the construction of berths and wharfs reaching its peak during this period.

It is estimated that 280 billion yuan was ploughed into port construction during this period, with handling capacity leaping by 1.6 billion tons.

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But, as far as Wu is concerned, quality is now more important than quantity.

"It was unnecessary to build so many wharfs," he complained.

"This over-construction only served to increase competition between ports, which is disastrous as the global economy enters a recession," Wu warned.

Now, the time is ripe for China's ports to upgrade themselves and improve their service quality.

He was echoed by Liu Bin, a professor from Dalian Maritime University. "Chinese ports should try to build themselves into logistics centers, providing all-round services, offering much more than just loading and unloading," said Liu.

It is estimated that port-related services including goods transfer by ship, road and rail could create five times as much income as loading and unloading.

This upgrading is all the more significant considering the central government's 4 trillion yuan stimulus to boost domestic consumption.

As part of the stimulus package, a batch of infrastructure projects will be launched. They include building expressways, roads, bridges and railroads - all of which require crude oil and steel. And growing domestic consumption as a result of the stimulus also means more frequent goods transportation nationwide.

Chinese ports have sensed this opportunity and have been upgrading since late last year.

Yantian has specifically designated the western region of the port to handle domestic trade, and it also partnered with Dalian port in northern China, opening a new domestic shipping line to northeastern China. It also signed an agreement with Sinotrans Limited, opening a barge line to Zhongshan in Guangdong.

Meanwhile, Qingdao, China's fifth-largest port and the nation's second-largest export-oriented port next to Yantian, said recently that it would add three iron ore and crude oil wharfs in the next two to three years, to cater to growing domestic demand resulting from pipeline construction .

Construction of a 300,000-ton crude oil wharf, the largest of its kind in China, costing 500 million yuan, was completed in December 2008.

The port has kept in touch with international iron ore companies since the latter half of last year. It imported a large volume of iron ore at a cheaper price, expecting to reap fat profits when better days return to the domestic economy and the price of iron ore rises.

Tianjin, the nation's sixth-largest port, is building a bulk cargo logistics center in its Nanjiang region, and a container logistics center in the Beijiang region.

The port also set up 10 dry hubs in China's inland regions, which speeds up the customs clearance process and reduces transportation fees, thus helping it gain popularity among manufacturers from those regions.

"There are always business opportunities even in bad times. Getting hold of them, you will stand out," said the port's spokesperson.

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