hkskyline
June 1st, 2005, 04:21 AM
Ports crunch for exports
Alison Leung
June 1, 2005
http://www.thestandard.com.hk/stdn/std/China/images/bridge0601.jpg
The East China Sea Bridge, construction of which has just been completed, is aimed at ending transport bottlenecks caused by China's exports boom. XINHUA
The spectacular 32-kilometer East China Sea Bridge stretching from Shanghai to Yangshan island port is the latest mainland effort to end transport bottlenecks caused by its export-driven boom.
But even as China spends hundreds of billions of dollars to upgrade and expand its shipping terminals, railroads and airports, its trading partners' inadequate facilities could threaten its sustained growth.
"If the ships can't discharge in the United States and Europe, China exports will back up and eventually slow down," said AP Moller Maersk Group partner Tommy Thomsen recently. "If China slows down, everything slows down."
China's emergence as an export powerhouse and its voracious appetite of raw materials to fuel its manufacturing machine have triggered a global boom in shipping that has led to backups and delays at ports from Los Angeles to Rotterdam. August-October peak season delays at California ports last year were double the three to four days normally required to clear vessels.
China's foreign trade last year was worth US$1.15 trillion (HK$8.97 trillion) and about 85 percent of exports are shipped through ports, said State Development and Reform Commission researcher Luo Ping.
But US and European ports lack new capacity because long-term plans were made when trade growth figures were low, according to a recent report from Morgan Stanley. Lengthy environmental impact assessments have also delayed expansions.
"There is [also] low efficiency at the ports due to labour issues and a lack of technology, particularly in the United States," the report added.
Largely as a result of China's rapid growth, global shipping capacity has become strained, with shipyards scrambling to fill order backlogs stretching out three or four years.
"In spite of the fact that steel prices have doubled and fuel prices are surging, order books for new tonnage are full," said Thomsen.
And the jams could worsen. Container vessels with capacity of 10,000 twenty-foot equivalent units (TEUs) - the largest on the seas - are being built. COSCO Container Lines has ordered eight of them. But even at the most efficient ports, these vessels generally take four to five days to unload and load.
"China, we believe, will be able to handle that deluge of more and larger ships," said Thomsen. "What about Europe? What about North America?"
A sustained capacity crunch at US and European ports has the potential to slow global trade. "There does not appear to be any plan in sight to rectify the situation," said Thomsen.
This year alone, China plans to invest about US$12 billion to expand and upgrade its creaky railway system. Power shortages are common, in part due to a lack of rail capacity to transport coal from mines to power plants.
The investment is part of an expansion plan approved last year to extend the railroad network by more than one-third, to 100,000 km, at a cost of about US$242 billion.
Foreign companies such as France's Alstom, Germany's Siemens, Canada's Bombardier and Japan's Kawasaki Heavy Industries, are competing to sell rail facilities and technologies to China.
Beijing plans to invest about 40 billion yuan (HK$37.7 billion) this year on ports-related infrastructure, with 120 new berths set to open during the year.
Heavy port spending plans have led some critics to warn of a glut, as ports from Shenzhen to Qingdao add capacity - a contention dismissed by officials.
Throughput at mainland ports has been growing by 30 percent a year, and reached 61.8 million TEUs last year. China expects to move more than 75 million TEUs this year and 120-140 million by 2010.
That potentially explosive growth has attracted leading global port operators. Hong Kong's Hutchison Whampoa, Singapore's PSA International, AP Moeller-Maersk's APM Terminals and others are vying to invest in the 100 billion yuan Yangshan port, which will eventually have about 52 berths.
"The current development is based on market demand and integrating with central government [policy]," said Communications Minister Zhang Chunxian.
REUTERS
Alison Leung
June 1, 2005
http://www.thestandard.com.hk/stdn/std/China/images/bridge0601.jpg
The East China Sea Bridge, construction of which has just been completed, is aimed at ending transport bottlenecks caused by China's exports boom. XINHUA
The spectacular 32-kilometer East China Sea Bridge stretching from Shanghai to Yangshan island port is the latest mainland effort to end transport bottlenecks caused by its export-driven boom.
But even as China spends hundreds of billions of dollars to upgrade and expand its shipping terminals, railroads and airports, its trading partners' inadequate facilities could threaten its sustained growth.
"If the ships can't discharge in the United States and Europe, China exports will back up and eventually slow down," said AP Moller Maersk Group partner Tommy Thomsen recently. "If China slows down, everything slows down."
China's emergence as an export powerhouse and its voracious appetite of raw materials to fuel its manufacturing machine have triggered a global boom in shipping that has led to backups and delays at ports from Los Angeles to Rotterdam. August-October peak season delays at California ports last year were double the three to four days normally required to clear vessels.
China's foreign trade last year was worth US$1.15 trillion (HK$8.97 trillion) and about 85 percent of exports are shipped through ports, said State Development and Reform Commission researcher Luo Ping.
But US and European ports lack new capacity because long-term plans were made when trade growth figures were low, according to a recent report from Morgan Stanley. Lengthy environmental impact assessments have also delayed expansions.
"There is [also] low efficiency at the ports due to labour issues and a lack of technology, particularly in the United States," the report added.
Largely as a result of China's rapid growth, global shipping capacity has become strained, with shipyards scrambling to fill order backlogs stretching out three or four years.
"In spite of the fact that steel prices have doubled and fuel prices are surging, order books for new tonnage are full," said Thomsen.
And the jams could worsen. Container vessels with capacity of 10,000 twenty-foot equivalent units (TEUs) - the largest on the seas - are being built. COSCO Container Lines has ordered eight of them. But even at the most efficient ports, these vessels generally take four to five days to unload and load.
"China, we believe, will be able to handle that deluge of more and larger ships," said Thomsen. "What about Europe? What about North America?"
A sustained capacity crunch at US and European ports has the potential to slow global trade. "There does not appear to be any plan in sight to rectify the situation," said Thomsen.
This year alone, China plans to invest about US$12 billion to expand and upgrade its creaky railway system. Power shortages are common, in part due to a lack of rail capacity to transport coal from mines to power plants.
The investment is part of an expansion plan approved last year to extend the railroad network by more than one-third, to 100,000 km, at a cost of about US$242 billion.
Foreign companies such as France's Alstom, Germany's Siemens, Canada's Bombardier and Japan's Kawasaki Heavy Industries, are competing to sell rail facilities and technologies to China.
Beijing plans to invest about 40 billion yuan (HK$37.7 billion) this year on ports-related infrastructure, with 120 new berths set to open during the year.
Heavy port spending plans have led some critics to warn of a glut, as ports from Shenzhen to Qingdao add capacity - a contention dismissed by officials.
Throughput at mainland ports has been growing by 30 percent a year, and reached 61.8 million TEUs last year. China expects to move more than 75 million TEUs this year and 120-140 million by 2010.
That potentially explosive growth has attracted leading global port operators. Hong Kong's Hutchison Whampoa, Singapore's PSA International, AP Moeller-Maersk's APM Terminals and others are vying to invest in the 100 billion yuan Yangshan port, which will eventually have about 52 berths.
"The current development is based on market demand and integrating with central government [policy]," said Communications Minister Zhang Chunxian.
REUTERS