Page 150 - 2015_WhitePaper_web
P. 150
5 White Paper on the Business Environment in China
burdens, the guidelines also allow for more favorable land-use port design projects do need certain forward-looking charac-
policies, the integration of resources and the strengthening of teristics. But local governments should also be realistic about
coordination between government departments.13 the airports’ prospects […] unfortunately, most local o cials
prefer large-scale projects, it’s like they are ashamed to build
“China’s State Council has given rst priority to more than a small airport.”14
20 cities in nine regions for an infrastructure upgrade in the
next two years... [which upgrades] have already improved op- By 2013 it was reported that pro ts remain elusive. “Of
erational e ciencies in China’s transportation and logistics,” China’s 183 airports, 143 are loss making, [a fact which sug-
observed the above-cited A. T. Kearney report, which contin- gests] that more than 60 of the 80 new airports envisioned in
ued that “Other recent infrastructure improvements that have China’s economic master plan for 2011-2015 will end up in
helped the industry include a wave of new regional logistics the red.”15
distribution centers, logistics parks, modern warehouses and
improved distribution facilities.”10 “Developing an aviation hub is more than simply building
an airport,” says one consultant. “It rst of all requires mini-
Improvement e orts continue; the PRC government is ex- mum annual passenger ows of 10 million and cargo volume
pected to invest in excess of 1.5 trillion yuan in the aviation of 200,000 tons, she said. Only Beijing, Shanghai, Guang-
sector alone during the 12th Five-year Plan period, increasing zhou, Chengdu, Shenzhen and Kunming met that criteria at
the number of airports from 175 to 220 and the number of the end of 2012.”15
aircraft from 2,600 to 4,500.8
More broadly, KPMG observed in 2011 that improve-
Following up on investment funding earmarked for ments in the domestic industry’s IT infrastructure, in better
aviation, China Daily reported in November 2012 that management practices and more sophisticated, integrated
several months prior the State Council “issued a document solutions would help to eliminate some of the existing inef-
to encourage the development of China’s civil aviation
industry” and that “In the same month, the Civil Aviation ciencies in addition to—or perhaps instead of—direct gov-
Administration of China said that the country plans to build ernment action.8
82 new airports and expand 101 existing ones across the
country from 2011 to 2015”14—the same period covered by A trend toward consolidation of discrete services within
the 12th Five-year Plan. the transport and logistics industry has also been observed,
but as a result of more segments of the supply chain, includ-
Central authorities are furthermore putting their money ing transportation, warehousing, logistics and management of
where their mouth is, with the NDRC having “approved 24 the supply chain itself, being outsourced to specialized service
projects to build new airports and expand existing airports, providers rather than as part of consolidation e orts by the
with an estimated investment of around 100 billion yuan PRC’s Government16 (which, it was reported, had required
($15.9 billion),” over the course of 2012.14 Air China, China Eastern and China Southern to strengthen
their cooperation in the cargo industry in order to “order to
Provincial authorities, the article continues, have wasted gain the upper hand in the domestic cargo market from for-
no time in jumping aboard the initiative: eign carriers”).17
[In October], Hunan province said it planned to build Another interesting development among local players is
21 general aviation airports* in the next 18 years. domestic giant SF Express reportedly negotiating with Sie-
mens over green mobility products.18
Earlier, neighboring Hubei province also said it would
build seven commercial airports and two general avia- In the United States, trade with China—and the logistical
tion airports in the next 18 years.14 requirements that accompany it—have been hugely bene cial
for west coast port communities such as Los Angeles. As
Although government o cials seem keen to expand the reported in the New York Times in 2007, “Processing and
nation’s network of airports—currently fewer than 300, in- distributing millions of freight-laden containers through the
cluding general aviation airports14—others are more cautious region and out to the rest of the United States have become
about expansion for expansion’s sake. Civil Aviation Manage- the largest source of jobs in the region.”19
ment Institute of China professor Zou Jianjun warns, “Air-
Fuel costs, however, remain a persistent concern for the
industry as a whole. It was reported in September 2008 that as a
result of the 18 percent increase in diesel and gasoline prices in
* General aviation airports, as China Daily helpfully explains, “are designed to handle four to 10-seat aircraft, as well as planes used for agricultural, industrial
and rescue purposes.”14
150
burdens, the guidelines also allow for more favorable land-use port design projects do need certain forward-looking charac-
policies, the integration of resources and the strengthening of teristics. But local governments should also be realistic about
coordination between government departments.13 the airports’ prospects […] unfortunately, most local o cials
prefer large-scale projects, it’s like they are ashamed to build
“China’s State Council has given rst priority to more than a small airport.”14
20 cities in nine regions for an infrastructure upgrade in the
next two years... [which upgrades] have already improved op- By 2013 it was reported that pro ts remain elusive. “Of
erational e ciencies in China’s transportation and logistics,” China’s 183 airports, 143 are loss making, [a fact which sug-
observed the above-cited A. T. Kearney report, which contin- gests] that more than 60 of the 80 new airports envisioned in
ued that “Other recent infrastructure improvements that have China’s economic master plan for 2011-2015 will end up in
helped the industry include a wave of new regional logistics the red.”15
distribution centers, logistics parks, modern warehouses and
improved distribution facilities.”10 “Developing an aviation hub is more than simply building
an airport,” says one consultant. “It rst of all requires mini-
Improvement e orts continue; the PRC government is ex- mum annual passenger ows of 10 million and cargo volume
pected to invest in excess of 1.5 trillion yuan in the aviation of 200,000 tons, she said. Only Beijing, Shanghai, Guang-
sector alone during the 12th Five-year Plan period, increasing zhou, Chengdu, Shenzhen and Kunming met that criteria at
the number of airports from 175 to 220 and the number of the end of 2012.”15
aircraft from 2,600 to 4,500.8
More broadly, KPMG observed in 2011 that improve-
Following up on investment funding earmarked for ments in the domestic industry’s IT infrastructure, in better
aviation, China Daily reported in November 2012 that management practices and more sophisticated, integrated
several months prior the State Council “issued a document solutions would help to eliminate some of the existing inef-
to encourage the development of China’s civil aviation
industry” and that “In the same month, the Civil Aviation ciencies in addition to—or perhaps instead of—direct gov-
Administration of China said that the country plans to build ernment action.8
82 new airports and expand 101 existing ones across the
country from 2011 to 2015”14—the same period covered by A trend toward consolidation of discrete services within
the 12th Five-year Plan. the transport and logistics industry has also been observed,
but as a result of more segments of the supply chain, includ-
Central authorities are furthermore putting their money ing transportation, warehousing, logistics and management of
where their mouth is, with the NDRC having “approved 24 the supply chain itself, being outsourced to specialized service
projects to build new airports and expand existing airports, providers rather than as part of consolidation e orts by the
with an estimated investment of around 100 billion yuan PRC’s Government16 (which, it was reported, had required
($15.9 billion),” over the course of 2012.14 Air China, China Eastern and China Southern to strengthen
their cooperation in the cargo industry in order to “order to
Provincial authorities, the article continues, have wasted gain the upper hand in the domestic cargo market from for-
no time in jumping aboard the initiative: eign carriers”).17
[In October], Hunan province said it planned to build Another interesting development among local players is
21 general aviation airports* in the next 18 years. domestic giant SF Express reportedly negotiating with Sie-
mens over green mobility products.18
Earlier, neighboring Hubei province also said it would
build seven commercial airports and two general avia- In the United States, trade with China—and the logistical
tion airports in the next 18 years.14 requirements that accompany it—have been hugely bene cial
for west coast port communities such as Los Angeles. As
Although government o cials seem keen to expand the reported in the New York Times in 2007, “Processing and
nation’s network of airports—currently fewer than 300, in- distributing millions of freight-laden containers through the
cluding general aviation airports14—others are more cautious region and out to the rest of the United States have become
about expansion for expansion’s sake. Civil Aviation Manage- the largest source of jobs in the region.”19
ment Institute of China professor Zou Jianjun warns, “Air-
Fuel costs, however, remain a persistent concern for the
industry as a whole. It was reported in September 2008 that as a
result of the 18 percent increase in diesel and gasoline prices in
* General aviation airports, as China Daily helpfully explains, “are designed to handle four to 10-seat aircraft, as well as planes used for agricultural, industrial
and rescue purposes.”14
150
