Shanghai, Ningbo & Shenzhen ports are China's new maritime gateways

Updated: 05 Feb 2011
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There has been quiet but remarkable realignment and repositioning in the order in the sea. Of the 10 busiest ports in the world, nine are in Asia; of the top 10, five are in the Chinese mainland; Singapore is struggling hard to regain its No 1 position; and Hong Kong, which was for so long engaged in a two-horse race with the island republic, has been relegated to third position; and the emerging powerhouse Shenzhen comes in at fourth.

There is nothing surprising about this changed script. It is all because of the fabled China factor that is quite in consonance with its long and steady march to the acme of growth and success.

In short, the gentle colossus that is China has stirred up quite a revolution in the waters.

"The explosion in international trade has had a tremendous impact on the port sector, something that has forced China's planners to expand its port capacity. It's a matter of national interest. The country's strong trade performance has continued to power ahead year by year," said Leslie Loh, a Shenzhen-based analyst at FAM, which focuses on supply-chain data analysis.

Riding the tide of global trade expansion, Shanghai has dethroned Singapore for the first time to earn the title of the world's busiest container port. According to the Shanghai International Port Group (SIPG), Hong Kong and Shenzhen are in a neck-and-neck race for the third and fourth place.

Shanghai port, which handled 29.1 million of 20-foot-equivalent units (TEUs) of standard sized container boxes in 2010, was up 16.3 percent year-on-year while its cargo tonnage grew 17.3 percent to 428.35 million tons. Singapore's container throughput for 2010 was slightly lower with 28.4 million TEUs, an increase of about 10 percent over 2009.

International container shipping that started in 1966, when a container ship sailed from Port Elizabeth in the US to Rotterdam in the Netherlands, has come a long way.

In the 1970s, only American and European ports dominated the scene and the port volume rankings would be shared by Oakland, Rotterdam, Seattle, Antwerp and Belfast. Singapore and Hong Kong were way down the ladder, and ports in the Chinese mainland barely registered their presence.

But as international goods and services grew stronger and global trade expanded exponentially, Singapore and Hong Kong steadily steamed their way to the top.

Enormously to its credit, Singapore held the status of being the busiest port in the world from 1986.

Shanghai's transformation into the world's busiest container port is the result of China's economic boom and explosive growth of exports in the Yangtze River Delta. While Hong Kong used to be the entrepot - the only gateway to the Chinese mainland in the past - Shanghai, Ningbo and Shenzhen soon became the country's new gateways. With outsourced manufacturing to China rising to unprecedented levels, cargo coming in and out from northern and central China gradually started going through the mainland's ports in the Yangtze and Pearl River deltas instead of Hong Kong.

China poured billions of dollars to improve facilities at Shanghai, Shenzhen, Qingdao, Ningbo, Tianjin, Guangzhou and elsewhere. New deepwater ports and more and bigger berths began to free China from its reliance on foreign ports to ship its own goods.

The Chinese government's priority to shore up its ports was clearly spelt out in its 11th Five Year Plan (2005-2010). It was part of the country's policy to support its massive economic growth. A strategy was charted out and huge funds were allocated. The theme of the whole plan was to transform Shanghai into a top-notch international shipping hub as well as the country's No 1 container port.

As China's cargo base grew, especially its manufacturing sector, demand for port and shipping services sector continued to fuel the expansion of port facilities along the coastal areas of the country. So much so that by 2009, six of the world's 10 largest ports were based on the mainland, according to Containerisation International's port traffic data.

But it is not all smooth sailing. As Chinese ports scramble to increase their container terminal handling capabilities, a lack of coordination between the ports has resulted in serious overcapacity problems and a wide disparity in tonnage handled by some of them. 
A researcher at the China Ports Association, Meng Wenjun, said container port construction surged in the past decade, but many of the berths could not be filled as foreign trade dried up in the wake of the global financial crisis in mid-2008.

According to a report on the operations related to containers, mineral ore, coal and crude oil, several ports are reporting lower container volumes and are saddled with overcapacity because global demand for Chinese goods dropped during the worldwide recession.

Veteran logistics analyst Charles de Trenck, however, has a different view. According to him, container port ranking does not tell the entire story.

"In my view, Hong Kong and Shenzhen port (working in partnership) is No 1 and Shanghai and Ningbo port is No 2," said Trenck, who runs a Hong Kong-based firm called Transport Trackers.

"Nothing much has changed (on the Chinese port scene) with the exception that the leading partner in both of these relationships has relied more and more on the junior partner. In the case of Hong Kong, Shenzhen will overtake and become the more senior partner in the coming years," he explained.

Located in the southern region of the Pearl River Delta in Guangdong province, Shenzhen is one of the busiest and fastest growing ports in the southern mainland and the economic hinterland for Hong Kong trade with the mainland.

According to the Shenzhen Ports Association, Shenzhen port's container throughput was up 23.3 percent to 22.5 million TEUs in 2010.

While official figures for Hong Kong port in 2010 have not been released yet, industry officials estimated that Hong Kong handled about 23.6 million TEUs last year, up almost 13 percent year-on-year.

Many official port figures for 2010 have yet to be released, but industry experts expect that the remaining ports in the top 10 are likely to be the same as in 2009, namely Busan, Guangzhou, Dubai, Ningbo-Zhoushan, Qingdao and Rotterdam.

"While the stimulation of domestic demand and investment has played an important role in reviving many economies, exports continue to be a major engine of growth in the region," said Ravi Ratnayake, director of Trade and Investment Division at UN Economic and Social Commission for Asia and the Pacific (ESCAP). "As a result, Asia's share in world exports continues to rise."

According to the Asia-Pacific Trade and Investment Report 2010 released by ESCAP, exports are expected to grow at a robust rate of 10.5 percent in 2011, led by China.

That explains why ports in Asia will continue to steam ahead of the rest of the world, spurred on by the "world factory" called China.

The author is a Hong Kong-based writer.

SOURCE: China Daily
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