Page 244 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
2.8 Logistics
Key Take-Aways the demand of the development under national
strategies like the Yangtze River economic belt and
US-China trade war knocks local government plans. China aims to build about
US$7.5 billion off 30 national logistics hubs by 2020, and 150 by
global airline profits. US-China tariff dispute, along 2025, when the ratio of total logistics expenses to
with high cost of fuel, will mean combined profit of GDP will be reduced to about 12 percent. (Xinhua,
US$28 billion—US$2 billion less than 2018—well China to Build).
down on expectations for the air freight industry.
China also aimed to reduce logistics costs by
The US-China trade dispute and lackluster nearly US$17.8 billion in 2019. China will continue to
corporate financial results are negatively affecting increase railway freight volume, upgrade its water
Hong Kong’s logistics businesses and has led transportation system, regulate highway freight
to mega mergers between several Hong Kong’s transport and speed up multimodal transport in a
biggest players in the field in an attempt to cap bid to improve its logistics network and optimize
the pressure from declining business volume. The its structure. It will also further integrate important
new International Land-Sea Trade Corridor could ports and harbors into the inland multimodal
be the answer. transport and logistics network, which will connect
them with more railways and highways and enable
China’s cold chain logistics market is set to improved cargo interoperability. The country will
boom and is likely to become the most lucrative also expand the use of pilot programs to deepen
sub-industry in the logistics field thanks to the reform of the administrative law enforcement
consumption upgrade and increasing demand for system in the logistics industry to improve its
commodities like fresh food and medicine. efficiency; and it will streamline certain fees related
to ports, highways and airports. In addition, the
ministry will step up its efforts to manage the effects
China has accomplished an airport building of eliminating highway toll stations at provincial
program on a scale rarely witnessed before boundaries. In recent years, China’s logistics
anywhere. Billions upon billions of dollars were industry has been experiencing consistent growth
poured into runways and terminals that have on the back of steady economic progress and a
plugged the entire country directly into the global rising domestic market. Logistics expenditures
transport network. rose 9.8 percent to 13.3 trillion yuan, amounting
to 14.8 percent of 2018’s national GDP. The share
Background was slightly up from 2017. The logistics sector is
of strategic importance in the development of
China began building about 15 national logistics the market economy, and the ministry has been
hubs in 2019 in its bid to build a nation-wide logistics making consistent efforts to reduce logistics costs
hub network. In principle, the national logistics hubs and raise efficiency. It reduced logistics spending
will be built on existent logistics hubs which have a by 56 billion yuan in 2016, 68 billion yuan in 2017
sound infrastructure, strong market demand and and 98 billion yuan in 2018. China ranked 12th
huge growth potential. The National Development that year in the World Bank’s logistics performance
and Reform Commission (NDRC) and the Ministry index covering 160 countries and regions. China’s
of Transport (MOT) will determine the locations of position has moved up 15 places since 2016 (Wang,
the first batch of national logistics hubs based on China Aims).
244
2.8 Logistics
Key Take-Aways the demand of the development under national
strategies like the Yangtze River economic belt and
US-China trade war knocks local government plans. China aims to build about
US$7.5 billion off 30 national logistics hubs by 2020, and 150 by
global airline profits. US-China tariff dispute, along 2025, when the ratio of total logistics expenses to
with high cost of fuel, will mean combined profit of GDP will be reduced to about 12 percent. (Xinhua,
US$28 billion—US$2 billion less than 2018—well China to Build).
down on expectations for the air freight industry.
China also aimed to reduce logistics costs by
The US-China trade dispute and lackluster nearly US$17.8 billion in 2019. China will continue to
corporate financial results are negatively affecting increase railway freight volume, upgrade its water
Hong Kong’s logistics businesses and has led transportation system, regulate highway freight
to mega mergers between several Hong Kong’s transport and speed up multimodal transport in a
biggest players in the field in an attempt to cap bid to improve its logistics network and optimize
the pressure from declining business volume. The its structure. It will also further integrate important
new International Land-Sea Trade Corridor could ports and harbors into the inland multimodal
be the answer. transport and logistics network, which will connect
them with more railways and highways and enable
China’s cold chain logistics market is set to improved cargo interoperability. The country will
boom and is likely to become the most lucrative also expand the use of pilot programs to deepen
sub-industry in the logistics field thanks to the reform of the administrative law enforcement
consumption upgrade and increasing demand for system in the logistics industry to improve its
commodities like fresh food and medicine. efficiency; and it will streamline certain fees related
to ports, highways and airports. In addition, the
ministry will step up its efforts to manage the effects
China has accomplished an airport building of eliminating highway toll stations at provincial
program on a scale rarely witnessed before boundaries. In recent years, China’s logistics
anywhere. Billions upon billions of dollars were industry has been experiencing consistent growth
poured into runways and terminals that have on the back of steady economic progress and a
plugged the entire country directly into the global rising domestic market. Logistics expenditures
transport network. rose 9.8 percent to 13.3 trillion yuan, amounting
to 14.8 percent of 2018’s national GDP. The share
Background was slightly up from 2017. The logistics sector is
of strategic importance in the development of
China began building about 15 national logistics the market economy, and the ministry has been
hubs in 2019 in its bid to build a nation-wide logistics making consistent efforts to reduce logistics costs
hub network. In principle, the national logistics hubs and raise efficiency. It reduced logistics spending
will be built on existent logistics hubs which have a by 56 billion yuan in 2016, 68 billion yuan in 2017
sound infrastructure, strong market demand and and 98 billion yuan in 2018. China ranked 12th
huge growth potential. The National Development that year in the World Bank’s logistics performance
and Reform Commission (NDRC) and the Ministry index covering 160 countries and regions. China’s
of Transport (MOT) will determine the locations of position has moved up 15 places since 2016 (Wang,
the first batch of national logistics hubs based on China Aims).
244
