Report: Yangtze Transport 2008 – Accessing China’s Interior

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Our old friend David Lammie at Yantze Business Services provides news of their updated report on Yangtze river ports.

Yangtze container volumes increase 38 per cent in 2007 as domestic trade surges; Huge spending on transport networks opens up the interior to more inward investment

Container traffic volumes on the Yangtze River surged to a record high of 5.54m teu in 2007, an increase of 38 per cent over the previous year, according to a report published today entitled ‘Yangtze Transport 2008: Accessing China’s Interior’. Figures from the Yangtze River Administration under China’s Ministry of Transport show that cargo throughput of the major ports along the Yangtze trunk line stood at 918m tons, up 16.6 per cent from the previous year.

Despite these upward trends, however, the river is a heavily underutilised transport resource. Traffic remains heavily concentrated in the lower reaches where the shipping conditions are better, the local economies are more dynamic and access to the sea is easier. Cargo throughput in the Jiangsu ports up to Nanjing, located just 300km from the sea, accounted for two-thirds of the Yangtze’s total in 2007.

The ongoing dredging programme at the mouth of the Yangtze is one factor that has contributed to the surge in overall shipping volumes. Indeed, massive investment along the length of the river along with its supporting road, rail and air cargo network is rapidly changing China’s economic landscape, according to the report.

By summer 2009 when the Three Gorges Dam is completed, Beijing planners will have realised their ambition of creating an all-year-round shipping channel to allow 10,000 dwt barge fleets to sail from Chongqing to Shanghai – a distance of some 2,500km — within no more than seven days. Huge sums of money are also being spent to build a Riverside Expressway, a Riverside Highway and a Riverside Railway, all running parallel to the Yangtze and due to open in the next few years. The Riverside Expressway, which will be completed by the end of 2010, will reduce the journey time by car between the two municipalities to around 24 hours.

In addition to these major national projects, money is also being poured in at a local level. Chongqing municipal government, for instance, invested Rmb27bn in transportation infrastructure in 2007 alone, an increase of 124 per cent over the previous year. In January 2008, Sichuan signed an agreement with the Ministry of Railways to build six railway lines that will pass through the province. They will cost Rmb310bn to build and will have a total length of 4,900km, of which 1,900km will be in the province itself. Most of the lines will be completed by 2012. By then, train journeys from Chengdu to the neighbouring provincial capital cities such as Guiyang, Lanzhou, Kunming, Xian and Wuhan will be only four hours.

These and other investments in transport infrastructure along the ‘Golden Waterway’ are already having an impact on the national economic landscape, according to the Yangtze report. While an influx of manufacturing investors in the interior has yet to materialise, there are signs that activity is picking up. In the first three quarters of 2007, six central provinces, including Anhui, Henan, Hubei, Hunan, Jiangxi and Shaanxi attracted US$11.5bn in foreign investment, a 46 per cent increase year-on-year. Wuhan, capital of Hubei province, reaffirmed its status as the leading centre for FDI in central China, attracting utilised foreign direct investment (FDI) of US$2.25bn in 2007. Further west, in Chongqing, utilised FDI increased 56 per cent to reach US$1.085bn in 2007.

According to Chongqing’s transport infrastructure blueprint, approved by the central government, five major road routes will be established by 2020; they will not only link China’s largest city with neighbouring inland provinces such as Hubei, Hunan, Guizhou and Sichuan, but also to the Yangtze River Delta and the Pearl River Delta beyond. This will fulfil the government’s plan to establish Chongqing as the regional logistics hub for the upper reaches of the Yangtze, together with Wuhan on the middle reaches and Shanghai on the lower reaches. In this sense, China is looking to follow the experience of the US, whose current world economic dominance dates back to the 19th century when it started to build its trans-continental railway network, followed decades later by the interstate highway system. These vast transportation arteries opened up America’s interior, allowing Midwest cities such as Chicago and Detroit to flourish as part of the country’s industrial heartland.

Chongqing is playing an increasingly important role in the national economy. Within the next 15-20 years, the report says, the city will emerge as western China’s economic powerhouse, providing momentum and sustainability to China’s remarkable economic growth in the long run.

About Yangtze Transport 2008
The first edition of this bilingual report was published in 2006. The second edition, completely updated and revised, contains 12 chapters of independent analysis on key transport issues, including government policies, investment opportunities, shipping trends along the Yangtze and the changing nature of the road, rail and air cargo networks in the region. The guide also profiles the 24 major port cities along the Yangtze trunkline, detailing the most important industries, leading companies, investment zones and the local transport infrastructure. Each port city profile also features a local transport map and case studies of foreign-invested enterprises already operating there. Price £190.

To find out more information, contact David Lammie on: dl[AT]YangtzeBusinessServices.com.

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