The document provides an overview of China's major economic regions and their key characteristics. It describes the Pearl River Delta as China's most vibrant economic region, located near Hong Kong. It is a major manufacturing and consumer market hub. The Yangtze River Delta region surrounds Shanghai and includes major cities like Nanjing and Suzhou. It generates over a fifth of China's GDP and a third of foreign trade. The Bohai Bay region includes Beijing and Tianjin and accounts for around 9% of China's national GDP. The document analyzes each region's economy, logistics infrastructure and dynamics.
9. Shenzhen and Guangzhou airports–freight capacity, better facilities, improved customs clearance environments, supporting infrastructure networks and improved services at both Shenzhen and Guangzhou airports are likely to put increased pressure on Hong Kong airport as a lower cost alternative. By 2015 cargo throughput at Shenzhen airport is expected to reach 2.5m tonnes.
10. Ports in the PRD are and will increasingly be competing for shares of hinterland cargo by extending their cargo draw capacity further inland through the expansion of intermodal rail facilities nationwide and dedicated port to city container railways (e.g. Shekou-Changsha). Industrial development on the western banks of the Pearl River is likely to accelerate as new port facilities on the western shore open up the relatively underdeveloped and lower cost region to increased access and direct investment.
11. Macro economic policies to integrate the PRD into the wider southern and southwest regions of China will likely increase the flow of goods through the PRD gateway to the world.
12. Increased GDP and consumer expenditure will continue to make the region an attractive market for international manufacturers, especially those specialising in high-value consumer goods.
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14. Completion of the government’s plan to develop Shanghai into a global shipping centre by 2020, with the ostensible aim of integrating and streamlining services between the currently somewhat disparate ports in the region could very likely see increased efficiency and throughput volumes across the region.
15. The possible introduction of a tax free port zone – similar to that which propelled Hong Kong port to world status is likely to make the port a more attractive destination for increased logistics investment in the future.
16. The development of cross straits trade with the island of Taiwan is likely to lead to a swath of new investment from the island into the YRD hinterland – the lion’s share of which is likely to be in high tech intermediate good assembly for domestic consumption and re-export.
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18. Pools of cheap labour and good quality supporting infrastructure exist to service industries that choose to relocate there.
19. Ambitious expansion projects are already underway at Tianjin port, as well as Dalian, and other ports in the region with the long term aim of developing the region into a Northwest Shipping Centre to rival the Shanghai Shipping Centre down the coast.
20. High speed rail links already connect the two major cities in the region greatly enhancing the economic intergration and cooperation in the region.
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22. Chengdu’s potential as the economic powerhouse of inland China is being realised. Intel’s decision to base a major production facility in the Sichuan capital—a decision made after public prevarication—indicates, in a sense, that Chengdu has arrived. Following in this slipstream, more businesses will undoubtedly follow, creating yet more demand for logistics services still less developed than those on the east coast.
23. Chongqing’s rise as an inland financial capital and the de-facto Western terminus of the Yangtze River trade indicates a long term determination to fully intergrate the region into China’s sphere of wealth as well as shifting the financial centre of gravity in the country, at least to some degree, further west.
24. Chongqing is the largest commercial port on the upper reaches of the Yangtze granting access to China's southwest, central and northeast regions. Chongqing is also China's most important western industrial zone - motor vehicle manufacturing, chemical engineering, pharmaceuticals and textiles are all developed industries and the service sector is continuing to grow. All these factors point to Chongqing's enormous latent logistics market demand.
25. Chongqing Government is currently investing CNY 1bn (USD 124.5mn) in construction of a southwestern logistics centre, begun in April 2006 the centre is planned for completion by 2010 making it China's primary inland logistics hub with an estimated cargo throughput of 300m tonnes.
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27. Much of the fat from the state-owned enterprises dotting the Northeast has been cut, but more remains. Privatising and downsizing major industries while avoiding mass-levels of unemployment will challenge the region’s leaders.
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29. Coal production—and its distribution-- in north-central provinces such as Shanxi play a major role in a country which relies heavily on coal-powered energy resources.
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31. As China’s energy and raw materials demand rises, there is likely to be increased demand for barge traffic to transport materials to industries adjacent to the river.
32. As developments to the Three Gorges Dam are completed, transit times will be reduced and freight rates should lower.
33. Increased logistical access to the region along the banks of the river should lead to an increase in FDI across the region traversed by the waterway.
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35. This proximity has opened the region to a flood of foreign investment and a subsequent rise in living standards that has swollen regional domestic demand.
36. Fragentation between regions on the coast remains an issue Beijing is keen to address by linking regions through administrative as well as infrastructural connections.
37. Growing detente across the straits will likely lead to a flood of investment from the island of Taiwan, most likely in the assembly of high tech goods from components manufactured on the other side of the straits.
38. This growth of investment and trade will likely lead to increased demand for high quality supply chain solutions in regions traditionally overlooked by many global logistics providers- such as connecting Fujian and other primary trading ports with links to Taiwan to lower cost pools of workers further inland.
39. Growth in trade will likely further spur domestic consumption of Taiwan produced goods creating higher demand for consumer good distribution strategies.