Will logistics services industry stand to profit from the Greater Bay Area scheme?
September 10, 2019
The National Development and Reform Commission and the Ministry of Transport jointly published a new “National Logistics Hub Distribution and Construction Plan” in December 2018. In this three-step development plan, the government targets to construct 30 modern national logistics hubs by 2020 and 150 by 2025, and the ratio of total logistics expenses to China’s GDP will be reduced to 12%. The first selection of about 15 national logistics hubs will be announced by the Chinese government soon. The blueprint incorporates investment of new technologies and equipment, artificial intelligence and big data, in supporting new models of the logistics industry – logistics complex, ports and warehouses will be operated by automated trucks, guided vehicles, smart robots and drones. The national construction plan focuses on infrastructure, building comparatively mature logistics hubs, which will become a strong support to the strategic development of the Greater Bay Area and other economic zones.
The Greater Bay Area (GBA) comprises nine cities in the Guangdong Province and two special administrative regions—Shenzhen, Guangzhou, Foshan, Dongguan, Zhuhai, Zhongshan, Huizhou, Zhaoqing, Jiangmen, Hong Kong and Macau. With a population of 70 million, the GBA has a current GDP of USD 15 trillion and ranks second in the world, behind Tokyo Bay and ahead of the San Francisco Bay region. It also represents 12% of entire Chinese economy.
According to the list of 2018 top 10 global container ports compiled by JOC.com, Shenzhen, Guangzhou and Hong Kong of GBA ranked 4th, 5th and 7th respectively, having container cargo throughput 25.73, 21.92 and 19.60 (in millions of TEU). These major ports in the GBA have their specialised roles. Shenzhen’s Yantian, Shekou and Chiwan, are in proximity to factories in the western part of the Pearl River Delta, focus primarily on export trade. Guangzhou Nansha is becoming a domestic cargo transhipment centre, handling shipments of goods to and from other ports along the coast of China. Hong Kong is the transhipment hub, bringing containers from South China and organising them into shipments to other global ports.
High-standard warehouses mostly locate in Foshan, Guangzhou and Dongguan in Guangdong province. New development of bay area warehouse is foreseen to expand into emerging zones such as Zhaoqing and Jiangmen. Development of national logistics hubs will stimulate the connectivity and interaction between the ports and warehouses, contributing the modern logistics service model of “hub-network-channel”, thus grooming local economic scenery.
With clear goals being set, accelerates by investment of GBA initiatives, logistics industry in southern province will undertake immense transformation. The e-commerce boom in China encourages heated competition and heavy technology investment within the sector, in turn benefits the future operation of the logistics hubs, make them surpassing the neighbouring countries.