Page 250 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
air shipments of high-value foods that have become super-heated expansion into aviation is aimed at
a growing part of their business. “Freight export future-proofing against demand but also to generate
volumes from China may not recover to their pre- economic growth. The government is really looking
tariff levels,” Cowen & Co. analyst Jason Seidl said in ahead, not only to meet the current demand but to
a May 2019 report. “Many shippers have adjusted stimulate future demand for air transportation. While
their supply chains to source goods from South China’s plan to build more than 200 airport facilities
Asia, South America, Mexico and Canada or the US” may seem extraordinary, it is the speed rather
(Wilkes et al). than the scale of this ambition that is remarkable.
It still pales beside the 5,000 public airports serving
The DHL Global Trade Barometer (GTB) indicated US towns, cities and communities. At present an
a contraction in worldwide trade over in June 2019 average of eight new airports are opening in the
for the first time since its launch in January 2018. country every year, while some facilities are being
Tim Scharwath, CEO of DHL Global Forwarding, The expanded and upgraded—but there are concerns
US saw “by far the heaviest losses” amongst all GTB within China that those already open are failing to
index countries, with its outlook declining by 11 meet modern expectations. Service has improved
points to 44. Those losses were mainly driven by a substantially, but existing airports are far from
negative outlook for major export categories, DHL adequate and are unevenly distributed throughout
said. China scores second in terms of losses, with the country. A large chunk of the upcoming facilities
a decline of seven points to 49. “China’s negative will be located in the Yangtze River Delta region, the
outlook was primarily driven by declining imports in Beijing-Tianjin-Hebei region and the GBA, as well as
several categories, combined with just minor overall the Chongqing and Chengdu city clusters. These are
export growth,” according to DHL. “Given the US’ and the areas with the highest populations but rely on a
China’s large contribution to the global index, their few hub airports to handle all traffic. In the coming
diminishing trade growth rates contribute to a large years, they will each have new world-class airports
extent to the projected global decline” (CAN). for their individual centers of population. Chengdu
Tianfu International Airport, for example, will open
Still, China will become the world’s largest in 2020. It’ll be Chengdu’s second aviation hub,
aviation market in the next three to six years. As time easing the pressure on busy Shuangliu International
goes on, the global aviation market will tilt toward Airport. There are challenges—including a potential
the Asia-Pacific region, where India’s market size staff shortage. Globally, the current generation of
ranking will rise to the third spot from seventh in aviation professionals will be retiring at a faster
the world and Indonesia’s to fifth from tenth in the pace in the next five to 10 years. While China plans
next 20 years, half the growth in the global aviation to expand rapidly in the next decades, they will be
market will come from the Asia-Pacific region, facing an acute shortage in manpower and thus far,
which will account for 55 percent, while growth and has thus far paid insufficient attention on this
from China will account for 28 percent in the Asia- subject (Falcus and Wong).
Pacific region. The fast-growing aviation market
will add pressure to airport infrastructure. Among Shenzhen in Guangdong province will build a
the world’s top 100 largest airports, only four have national logistics hub centered around Shenzhen
the infrastructure to satisfy the passenger volume Bao’an International Airport, according to the
growth in next five years. In the future, paperless recently issued implementation plan for the
service, utilizing big data to simplify security construction of a nation-wide logistics hub network
inspections, and automatic sorting by artificial (2019-20) by the National Development and Reform
intelligence technology will be the development Commission and the Ministry of Transport. The
direction for airports (Zhang). building of the Shenzhen Bao’an International
Airport National Logistics Hub can help promote the
China currently has around 235 airports, but economic development and industrial upgrading
with many lacking the capacity to sustain the in Shenzhen, as well as advance the construction
coming increase in passenger numbers and flights, of the GBA. A construction plan for the national
government officials estimate around 450 airports logistics hub has been initially formed, according to
will be needed across the country by 2035. Beijing’s the Shenzhen Transportation Bureau. It will cover an
250
air shipments of high-value foods that have become super-heated expansion into aviation is aimed at
a growing part of their business. “Freight export future-proofing against demand but also to generate
volumes from China may not recover to their pre- economic growth. The government is really looking
tariff levels,” Cowen & Co. analyst Jason Seidl said in ahead, not only to meet the current demand but to
a May 2019 report. “Many shippers have adjusted stimulate future demand for air transportation. While
their supply chains to source goods from South China’s plan to build more than 200 airport facilities
Asia, South America, Mexico and Canada or the US” may seem extraordinary, it is the speed rather
(Wilkes et al). than the scale of this ambition that is remarkable.
It still pales beside the 5,000 public airports serving
The DHL Global Trade Barometer (GTB) indicated US towns, cities and communities. At present an
a contraction in worldwide trade over in June 2019 average of eight new airports are opening in the
for the first time since its launch in January 2018. country every year, while some facilities are being
Tim Scharwath, CEO of DHL Global Forwarding, The expanded and upgraded—but there are concerns
US saw “by far the heaviest losses” amongst all GTB within China that those already open are failing to
index countries, with its outlook declining by 11 meet modern expectations. Service has improved
points to 44. Those losses were mainly driven by a substantially, but existing airports are far from
negative outlook for major export categories, DHL adequate and are unevenly distributed throughout
said. China scores second in terms of losses, with the country. A large chunk of the upcoming facilities
a decline of seven points to 49. “China’s negative will be located in the Yangtze River Delta region, the
outlook was primarily driven by declining imports in Beijing-Tianjin-Hebei region and the GBA, as well as
several categories, combined with just minor overall the Chongqing and Chengdu city clusters. These are
export growth,” according to DHL. “Given the US’ and the areas with the highest populations but rely on a
China’s large contribution to the global index, their few hub airports to handle all traffic. In the coming
diminishing trade growth rates contribute to a large years, they will each have new world-class airports
extent to the projected global decline” (CAN). for their individual centers of population. Chengdu
Tianfu International Airport, for example, will open
Still, China will become the world’s largest in 2020. It’ll be Chengdu’s second aviation hub,
aviation market in the next three to six years. As time easing the pressure on busy Shuangliu International
goes on, the global aviation market will tilt toward Airport. There are challenges—including a potential
the Asia-Pacific region, where India’s market size staff shortage. Globally, the current generation of
ranking will rise to the third spot from seventh in aviation professionals will be retiring at a faster
the world and Indonesia’s to fifth from tenth in the pace in the next five to 10 years. While China plans
next 20 years, half the growth in the global aviation to expand rapidly in the next decades, they will be
market will come from the Asia-Pacific region, facing an acute shortage in manpower and thus far,
which will account for 55 percent, while growth and has thus far paid insufficient attention on this
from China will account for 28 percent in the Asia- subject (Falcus and Wong).
Pacific region. The fast-growing aviation market
will add pressure to airport infrastructure. Among Shenzhen in Guangdong province will build a
the world’s top 100 largest airports, only four have national logistics hub centered around Shenzhen
the infrastructure to satisfy the passenger volume Bao’an International Airport, according to the
growth in next five years. In the future, paperless recently issued implementation plan for the
service, utilizing big data to simplify security construction of a nation-wide logistics hub network
inspections, and automatic sorting by artificial (2019-20) by the National Development and Reform
intelligence technology will be the development Commission and the Ministry of Transport. The
direction for airports (Zhang). building of the Shenzhen Bao’an International
Airport National Logistics Hub can help promote the
China currently has around 235 airports, but economic development and industrial upgrading
with many lacking the capacity to sustain the in Shenzhen, as well as advance the construction
coming increase in passenger numbers and flights, of the GBA. A construction plan for the national
government officials estimate around 450 airports logistics hub has been initially formed, according to
will be needed across the country by 2035. Beijing’s the Shenzhen Transportation Bureau. It will cover an
250
