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Shanghai ports sailing to world supremacy

New Yangshan container terminal attracts interest from global operators as they eye more business opportunities

BY DECLARING RECENTLY that Mumbai needed to emulate the example of Shanghai to become the ideal port city, Indian Prime Minister Manmohan Singh paid the Chinese metropolitan centre a great compliment.

In recent years, Shanghai has made giant strides in its efforts to become a city of international standards.

And one of the jewels in its crown is in the south, where a massive 52-berth container terminal is under way, attracting the attention of the cream of foreign terminal operators.

Every major port operator is eyeing the Yangshan project, including Hutchison Port Holdings, Singapore's PSA International, Modern Terminals (in partnership with China Shipping), A P Moller Terminals of Denmark, which owns the world's largest container line, Maersk Sealand, P&O Ports of Britain, CSX World Terminals, Orient Overseas Container Lines (OOCL) and French major CMA CGM.

When the terminal is ready, Shanghai's importance as a cargo hub will increase significantly.

The mainland has overtaken Taiwan to become the third-largest (after the United States and Japan) supplier of information technology hardware.

The epicentre for the IT boom is close to Shanghai, and Chinese agency Xinhua reported that 25 per cent of the world's notebook computers are now produced in the eastern city of Suzhou and exported through Shanghai.

Due to the advanced packaging industry around Shanghai, packaging material for foodstuffs is largely being moved out of the port.

The car industry is generating head-haul and back-haul cargoes from Shanghai, Chengdu, Shenzhen and Changchun.

Tertiary services such as express couriers are also flourishing.

An example is the fast-growing town of Kunshan, in the eastern province of Jiangsu, close to Shanghai.

Vice-president of FedEx in China Eddy Chan said: 'Kunshan is playing an increasingly important role in the Yangtze Delta.'

But other ports along the vast coastline have also made giant strides in the past few years. Dalian and Tianjin are busily loading ships with furniture for sale in the US. Both ports also load machinery, electronic products and industrial finished goods.

Tianjin ships chemicals, providing an outlet for Japanese investments in the petrochemicals sector. The port is expected to see inbound shipments boom for the Olympics, as Tianjin has been designated the cargo airport for the 2008 Olympic Games.

Qingdao's most important exports are refrigerated containerised cargoes, where apples and garlic are major commodities; and electronic appliances.

Ningbo, south of Shanghai, is home to China's leading domestic mobile handset vendors, and expects to hit an export volume of US$200 million this year.

Ports in the Pearl River Delta churn out low-cost consumer goods, from DVD players to toys, textiles and footwear.

Hong Kong companies are estimated to employ 11 million people on the mainland, of whom 10 million are in Guangdong.

They run the factories, while financing and negotiations with customers are conducted from Hong Kong-based head offices.

Container throughput at Hong Kong's port, already ahead of Singapore and Rotterdam as the world's busiest, rose 9.5 per cent last month, compared with September last year.

This increase came on the back of a 17 per cent rise in August.

Hong Kong moved a total of 1.99 million teu (20-foot equivalent units) of goods last month, bringing throughput for the first nine months of the year to 16.55 million teu, up 9.8 per cent from the first nine months of last year.

A Hong Kong Port Development Council official said: 'Shippers are rushing to meet their Christmas orders. Their schedules may be varied, so one month's figures do not represent a slowing of the growth trend.'

Sea traffic at the Kwai Chung terminal, which accounts for about 60 per cent of Hong Kong's seaport traffic, rose 12.3 per cent last month to 1.23 million teu, after posting a record growth of 21.1 per cent in August.

China's Minister of Communications, Zhang Chunxian, said recently Hong Kong was still the dominant port in the area, and that nearby mainland ports were merely 'complementary'.

'It is always the central government's policy and target to support Hong Kong to continue to be an international maritime hub. Shenzhen and Guangzhou in the Pearl River Delta are important complementary port facilities for Hong Kong, but it remains a global maritime centre,' Mr Zhang said.

Maersk managing director Charlie Wellins said much more work was needed in Hong Kong to ensure sustained growth at the world's No1 container port.

'We must embrace the one-market approach for the South China region,' Mr Wellins said.

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