bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

As provinces chase investment, central government plans to co-ordinate projects to avert overcapacity

China is taking steps to bring port development under national oversight as provinces compete for investment in the boom sector.

Efforts to draft a long-term strategic plan for the industry come as container terminals proliferate along the coast, prompting concerns of wasteful competition between regional governments.

A port planning guideline, to be released next year, will list the  capabilities and potential of  major ports, according to a senior official from the Ministry of Communications, which is penning the report.

'We are still working on that document. It's central planning that will be used as  guidelines for port development in different regions,' said the official.

The ministry will look at the big picture instead of local interests when drafting the plan. Port developments  should  be in balance with national economic growth.  Projects should also satisfy the need of economic growth in local regions.

Major coastal cities - including Shanghai, Ningbo, Tianjin, Qingdao and Dalian - have aggressively expanded their ports through the enticement of private sector capital. The investment flood has brought concerns about overcapacity.

Minister of Communications Zhang Chunxian acknowledged the problem at the National People's Congress in March. Central authorities would co-ordinate development, the minister said.

Reflecting these concerns, the government has put several port projects on hold, including the Dachan Bay and Yantian Phase IIIB projects in Shenzhen.

The two projects have been frozen for almost two years as part of an effort to slow the expansion of Shenzhen port,  industry sources believe.

Shenzhen port, which saw container throughput grow 28 per cent year on year to 12.39 million teu in the first 11 months, is the second busiest port  on the mainland, after Shanghai.  Nansha port in Guangzhou also is intensifying regional competition. A senior official from the Shenzhen Municipal Port Bureau hopes the two projects will move ahead soon.

On Wednesday, Premier Wen Jiabao and the State Council approved an intermediate plan for port developments in the Bohai Rim and Yangtze River and Pearl River deltas.  The State Council has stressed the need for central planning to better co-ordinate projects.

Qingdao, the No1 port in the north, kept a low profile this year after signing up P&O Ports, Cosco Pacific and AP Moller to develop its seven-berth project at Qianwan Phase III last year.

A row between the consortium and CSX World Terminals over the development rights to the Phase IV project  has left the Qingdao Port Authority  trying to play down the plan.

'The planning of Qianwan Phase IV is still very preliminary and it is yet to gain approval,'  director Tian Guangwen said.

Tianjin, also  on the Bohai Rim,  plans to develop a 1,100 metre shoreline with PSA Corp, OOIL and P&O Nedlloyd as early as next year.  The project is awaiting approval.

In the Yangtze River Delta, Ningbo is challenging Shanghai's US$18 billion Yangshan port by announcing a  nine-berth project at Chuangshan. Port officials said an agreement worth US$1.08 billion would be signed with three Hong Kong companies, believed to be Cosco Pacific, OOIL and Hutchison Whampoa next month, but no official approval has been given.

Sources within the shipping industry said the government's effort to co-ordinate development was becoming more apparent this year.

'For international trade, it's not justifiable for vessels to call at every stop like a taxi. It's a good thing for the central government to better co-ordinate development, or there will be a waste of resources,' said a Hong Kong-based shipping executive.

A port operator with  mainland interests said the government must balance provincial demands.

'As the central government has the ultimate say on which project can go ahead, it's normal for them to pace port development that way,' he said. But local officials would attempt to protect their interests, the executive said.

Tao Dong, chief regional economist at Credit Suisse First Boston, offers a harsher assessment.  'It's impossible to get everyone to chip in and raise the most beautiful kid in the group. Everyone wants to raise their own kids,' Mr Tao said.



Beijing brakes boom in ports