Guangxi in major push for regional trade

PUBLISHED : Saturday, 21 August, 2010, 12:00am
UPDATED : Saturday, 21 August, 2010, 12:00am

Fangchenggang port on the south coast of Guangxi was built in 1968 at the height of the Vietnam war to ship military supplies to the conflict-torn country.

The cities of Nanning, Chongzuo and Fangchenggang reaped the benefits of that lengthy battle. Today, these same cities in the Guangxi Zhuang Autonomous Region are involved in more peaceful pursuits with the Southeast Asian country.

Vietnam has become Guangxi's biggest trading partner, prompting the region to embark on building ports, railway and roads to expand its trade with other Southeast Asian nations as well.

Over the next two years, 150 billion yuan (HK$171.40 billion) will be invested in infrastructure in the Beibu Gulf Economic Zone, a region within Guangxi that includes the three ports of Fangchenggang, Beihai and Qinzhou, as well as the provincial capital, Nanning. Today the biggest investor in Fangchenggang is Hong Kong. Power producer CLP owns 70 per cent of the largest foreign-invested power station in the port city, said Qin Yongfang, an official at the Investment Promotion Bureau of Fangchenggang.

Fangchenggang's cargo capacity will expand from 60 million tonnes at the end of this year to 100 million tonnes by 2015, said Fangchenggang Port general manager Xie Yi.

Chongzuo, a few hours drive from the Sino-Vietnamese border, contains a cemetery for Chinese soldiers who died during the Sino-Vietnamese war in 1979. At present, the city is connected by road and rail to the Friendship Pass on the border. During the first half of the year, Chongzuo's international trade soared 68.53 per cent to US$1.5 billion.

The region has not always been so peaceful. Nanning has a history of conflict with Vietnam going back centuries. In 1075, a Vietnamese army invaded Nanning while the city was a military supply base for the Vietnamese during the French war in Indochina from 1946 to 1954 and the Vietnam War from the 1960s till the 1970s. Nanning was also an important military supply base for the People's Liberation Army's invasion of Vietnam in 1979.

That long history of war is now being replaced by trade talks. 'We want to strengthen ties and partnerships with Hong Kong, Macau, Guangdong and Asean,' said Nanning vice-mayor Xiao Zhigang.

'We plan to expand Nanning Airport and add flights to Europe to make Nanning an international hub,' he said.

The expansion of Nanning Airport began last year with an investment of 6 billion yuan. When the expansion is completed within three years, Nanning Airport's annual passenger capacity will have increased to 15 million.

Earlier this year, construction began on the 160,000 square metre Nanning East railway station. The project is receiving 6 billion yuan in investment.

The railway station is scheduled to be completed within three years, and its annual handling capacity is expected to reach 34 million passengers by 2020.

In 2009, Nanning's investment in fixed assets rose 50.5 per cent to 104.4 billion yuan, while its industrial output rose by 12.1 per cent to 117.6 billion yuan.

Guangxi province's total trade rose 7.3 per cent to US$14.2 billion in 2009. Its trade within the Association of South East Asian Nations rose at a much faster clip - 24.3 per cent - to US$4.95 billion.

The southern Chinese province's trade with Asean has risen almost fivefold from US$1 billion in 2004 to US$4.95 billion in 2009.

Guangxi's fixed asset investment rose 50.8 per cent to 570.7 billion yuan in 2009, with 646.68 kilometres of railway and 213 kilometres of expressways built.

The extensive scale of infrastructure construction in Guangxi is partly due to Guo Shengkun, who has been Guangxi Party Secretary since 2007.

Guo previously worked for an aluminium mine in Guangxi owned by the state-owned Aluminum Corporation of China. 'Guo sees things from an industrial point of view,' noted one official. 'That is why he places such importance on transport infrastructure.'

Qinzhou is another port on the south coast of Guangxi undergoing rapid expansion.

'When Qinzhou port was built in the 1990s, local citizens donated money for its construction, because the local government was so poor at that time and the people wanted their area to grow economically,' said a local official.

In the first half, the container throughput of Qinzhou port rose 140 per cent to 109,000 20-foot equivalent units (TEU), while its cargo throughput rose by 56.1 per cent to 14.16 million tonnes.

'We will try to increase Qinzhou's annual cargo capacity to 100 million tonnes by 2011,' said Yang Jingsong, a Qinzhou port official. Hong Kong accounts for most of Qinzhou port's cargo, while Asean is second with a 40 per cent share, said Yang.

Qinzhou port includes the Qinzhou Free Trade Port, which has a planned area of 10 square kilometres. The free trade port is expected to handle 1 million TEU of containers by 2012 and 1.8 million TEU by 2015.

A 50,000 tonne cargo park in Qinzhou Free Trade Port will start operation at the end of 2011, said Lin Guan, a Qinzhou official.

'The Qinzhou Free Trade Port can provide services for China-Asean trade. If Chinese companies export goods to Asean through other channels or China imports commodities from Asean through other routes, it may be expensive. Our free trade port is cheaper,' said Ding Qiwen, an official of the Qinzhou Free Trade Port.

The first phase of the Qinzhou Free Trade Port, with an area of 2.5 square kilometres, is due to start operations in two months.

Big plans, big money

Over the next two years, the Beibu Gulf Economic Zone will receive investment totalling, in yuan, 150b