Business / Industries

Logistics provider optimistic about Chinese economy

By SHI JING in Shanghai ( Updated: 2015-11-17 19:51

Despite frequently expressed worries over the economic slowdown, global logistics service provider UPS still finds 2015 to be one of its best years in China, according to Nando Cesarone, president of UPS Asia Pacific region.

"Concerned but optimistic about the Chinese economy", Cesarone said, adding that the company is not scared by statistics and that it also found opportunities here when the economy was not showing strong double-digit growth, as it was years ago.

The rising Chinese middle class with ample disposable money also indicates plenty of chances. This is also one of the reasons UPS announced plans to expand its presence in 13 additional Chinese cities in late September.

Focusing 100 percent on cross-border delivery services at present, Cesarone said UPS China will look more into opportunities in small- and medium-sized Chinese enterprises, whose logistics demand has been on the rise in recent years. Not only as a logistics service provider, UPS will also work as a name card for these SMEs to help them go overseas.

Cesarone also pointed out that China can help itself at a time of economic slowdown. While China is entering a number of trade agreements, the country can lose regulations in many areas in line with the rest of the world, such as customs and administrative process. For logistics companies, too many regulations might mean higher costs. Chinese companies spent nearly 18 percent of their costs on logistics while the figure was only 8 percent in the United States. According to Cesarone, this will result in a "clumsy distribution model", which is not very sustainable either.

Richard Loi, president of UPS China said that the loosening regulative environment in the many free trade zones in China has already started to make a difference. Even though it is "not perfect" right now, the company is looking forward to more facilitating policies to come in the near future.

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