BEIJING: The Chinese economy has said goodbye to high-speed growth as well as stable foreign trade volumes, which is putting pressure on the operations of Chinese ports, Tong Mengda, chief economist of Ningbo Port Group, told delegates at the Intermodal Asia 2015 conference in Shanghai in March.
These ports’ situation will be squarely at odds with their ambitions to expand if upcoming policy changes are factored in, Tong said. Some of changes may result from China’s free trade agreements with other countries and the free trade zones opened in the Chinese coastal regions of Fujian, Guangdong, Shanghai, and Tianjin.
China recently signed 13 FTAs, with another five in the pipeline. A new round of FTZs in Fujian, Guangdong, and Tianjin was officially launched in April.
“Both FTAs and FTZs are intended to encourage imports to China and China’s investment overseas,” Tong said. “But not all Chinese ports are set to benefit from the FTAs and FTZs.”
A port that is not located in an FTZ will be disadvantaged against its competitors because it cannot provide the same benefits. The FTZs of Fujian, Guangdong, Shanghai, and Tianjin cover the ports of Fuzhou, Guangzhou, Shanghai, Tianjin, West Shenzhen, and Xiamen.
“For example, Shanghai’s imports of consumer goods accounted for 29 percent of all such imports nationwide in 2014, after the establishment of the Shanghai FTZ in 2013,” Tong said. He also estimated that China’s steady rise in imports would continue.
Not taking into account the emerging factors, some long-standing challenges still cast a shadow over Chinese ports as they seek to develop, Tong said.
As manufacturing shifts inland, investment in Chinese ports has declined. In 2014, investment declined 3.1 percent to 95.2 billion yuan ($15.1 billion), according to statistics provided by the Ministry of Transport of China.
This decline coincides with drops in container volumes, as April and May of 2015 saw China’s top 20 ports record container volume growth averaging just one 1 percent.
Despite declines in investment and volumes, capacity at Chinese ports continues to grow.
Investment in 2014 saw 170 new and rebuilt piers and berths adding an aggregate capacity of 362.7 million tonnes (399.8 tons). Among the total additional capacity, about 331.2 million tonnes of capacity was built at berths with a capacity of more than 10,000 tonnes per year.
At the end of 2014 there were 5,834 berths in operation at Chinese coastal ports, up 159 from 2013. Among them, 1,704, have an annual capacity of more than 10,000 tonnes, an increase of 97 from 2013.
For annual throughput, the figure at Chinese coastal ports grew 6.2 percent in 2014 to 8 billion tonnes in 2014, with the throughput for foreign trade up 6.9 percent to 3.3 billion tonnes.
The ratio of cargo handling capacity to throughput now stands at 1.22 for Chinese ports, Xie Xie, a researcher with China’s Water Transport Institute, part of the Ministry of Transport, told IHS Maritime. “The ratio means that there is a 22 percent capacity surplus in the port sector,” Xie said. The surplus comes as most Chinese ports have witnessed single-digit growth in throughput in recent years.
Some Chinese ports are holding back on their expansion plans for the time being to adjust to this new reality after years of lightning growth. The Port of Qingdao has temporarily slowed down construction of the last six berths planned for the fourth phase of the Qingdao Qianwan Container Terminal. Among the six berths, four are under construction, while the other two await the completion of survey work. “As required by the company board, the six berths at Qianwan will be gradually completed on the basis of the company’s business growth,” said Qingdao Qianwan Container Terminal.
For ports’ future development, Tong advised them to foster “new edges” over competitors in areas such as information technology and management.
To this end Ningbo Port Group is gearing up to build a river-sea-land intermodal shipping service center in the port city. “River-sea intermodal shipping is more market-oriented than sea-land intermodal in China,” Tong said.
Looking ahead, Ningbo Port Group will give priority to the development of sea-railway intermodal shipping. While sea-railway intermodal volumes in 2014 accounted for less than 2 percent of all shipping volumes nationwide, the figure at Ningbo port stood at about 0.76 percent.
