8 Oct 2013
Guangxi: Finding logistics partners within the CAFTA Framework
Rapid development of trade between Guangxi and ASEAN countries in recent years has not only boosted logistics and transport activities in Guangxi, but also prompted local logistics companies to actively look for partners outside the region. Such companies are making an effort to enhance the connection with their partners’ networks. They are aiming to improve their logistics and distribution capacity of serving the ASEAN, Beibu Gulf and mainland markets, with an attempt to capitalise on the increasing ASEAN opportunities within the China-ASEAN Free Trade Area (CAFTA) framework.
Port activities benefit from ASEAN trade
Guangxi's Beibu Gulf faces the ASEAN countries, and is the major shipping channel connecting southwestern China and foreign countries. Beihai, Fangcheng and Qinzhou, the main ports along its coast, have always been the hub for merchandise trade between China and ASEAN. The bulk commodities traded include mineral ores, coal, sulfur and phosphorous, petrochemical products, grain and timber. Trade between Guangxi and ASEAN has intensified after the establishment of CAFTA and the resultant implementation of zero tariff and trade facilitation measures. These have not only facilitated trade in bulk commodities, but also industrial products, light manufactured goods and other agricultural, forestry and fishery products.
Cargo throughput* of Guangxi's Beibu Gulf (10,000 tons)
|Beibu Gulf ports: including||719||1,768||3,669||4,832||8,089||9,408||11,923||15,331|
Source: Guangxi Statistical Yearbook
Cargo passing through Beibu Gulf has witnessed double digit growth annually in recent years. The cargo throughput of ports around the gulf has in fact increased about eightfold between 2000 and 2011. Bulk materials and goods imported and exported through the Beibu Gulf are usually transported overland by railways or highways to the ports for shipping. Goods from the ASEAN countries are transported directly from their places of origin directly to production bases in Guangxi and other provinces. The reverse also holds true (that is, from the mainland/Guangxi to the ASEAN countries).
However, trade in other commodities which has been flourishing in recent years needs some totally different logistics services.
For example, in the export of manufactured goods from Guangxi, the logistics service providers consolidate less-container-loads of goods from different manufacturers and ship the containers after consolidation to vessels at the ports. As for goods from ASEAN countries, some are delivered directly to destinations as required by clients after unloading at the ports. But the bulk of the arriving cargoes have to go through transfer, devanning, temporary storage and other procedures before reaching their clients in Guangxi and other provinces via different distribution and wholesaling channels.
Nanning becomes distribution centre in southwestern China
Many logistics service providers began providing logistics services for smaller-sized commodities to meet market demand. Nanning, the capital of Guangxi, is the distribution centre of southwestern China and serves the Beibu Gulf and the adjacent provinces of Yunnan, Guizhou and Sichuan. Railway and highway networks connecting Guangxi with provinces like Hunan and Guangdong also have Nanning as the hub. Thus, many logistics service providers are using Nanning as the logistics base for trade in small-sized commodities with ASEAN countries.
Nanning has vigorously developed supporting logistics facilities and services in the city in recent years. Major measures include the construction of the Nanning Bonded Logistics Centre with a total planned area of 54 hectares which officially went into operation in mid-2010. The Centre provides customs declaration and inspection, bonded warehousing, transit logistics and other services. It aims to become a large-scale logistics and trading base connecting China's southwestern region, the ASEAN countries and the ports in the Beibu Gulf, while making itself the largest cold chain logistics centre in the western region.