Will Yangshan Port Challenge HK's Position as Int'l Shipping Center?

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Last updated at: (Beijing Time) Monday, July 21, 2003

Will Yangshan Port Challenge HK's Position as Int'l Shipping Center?

China has been constructing a deep-water port around the Yangshan isles to the east of Hangzhou Bay in a bid to turn Shanghai into an international shipping center.

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China has been constructing a deep-water port around the Yangshan isles to the east of Hangzhou Bay in a bid to turn Shanghai into an international shipping center.

The projected Yangshan Port, with an average water depth over 15 meters, will be 45 km from Pudong International Airport in Shanghai and will be connected to the city's outer ring road by a marine bridge and a freeway.

On completion by the year 2020, the port will be capable of handling 20 million TEUs (twenty-foot equivalent unit) of containers annually.

Chinese experts differ on whether or not Yangshan Port will challenge Hong Kong's position as an international shipping center.

Research fellows with the institute of planning under the Chinese Ministry of Communications said in a report that they didn't think there would be competition between the two ports.

"As an international shipping center in the fast east, Hong Kong relies to a large extent on south China's Guangdong Province,especially the Pearl River Delta, for containers, while Shanghai, which sits on the juncture of the east China coast and the Yangtze River economic zone, has the economically developed Yangtze River Delta and the regions along the middle and upper reaches of the Yangtze to supply cargo for transport," the fellows explained.

Xu Changle, head of the Institute for Yangtze River Valley Development attached to East China Normal University in Shanghai, believed that construction of Yangshan Port would not threaten Hong Kong's position as an international shipping center in the near future.

Hong Kong will continue to maintain its position as a container transport giant for at least five years, said Xu.

As the world's busiest container port, Hong Kong boasts the best natural conditions for a port in the world and has the most efficient soft environment that no other Chinese mainland sea ports can match in a short period of time, said Xu, who added more containers will be shipped via Hong Kong as China grows into one of the world's major sources of containers.

But as sea port modernization and construction gain steam in the Chinese mainland, it will be natural that Hong Kong's position as a hub for transfers to the Chinese mainland cities will undoubtedly be weakened, said Chinese port experts.

Statistics show that Hong Kong handled 19 million TEUs of containers last year, up 6.6 percent from 2001, setting a new world record. And Shanghai Port handled over 8.61 million TEUs of containers in 2002, up 36 percent.

With completion of Yangshan Port, however, Shanghai Port's container handling capacity will be further enhanced.

Zhang Huimin, deputy secretary-general of the Shanghai Municipal Government and deputy commander-in-chief with the headquarters for deep-water port construction, said the first phase of Yangshan Port, which began construction in late June last year, is expected to be finished on schedule by late 2005 and by then it will be able to handle 2.2 million TEUs of containers a year.

Hong Kong was used as a port of transfer for 20 percent of containers at Shanghai Port, or 1.72 million TEUs during 2002. If this proportion of containers are shipped to destinations directly from Shanghai, then Hong Kong will lose one tenth of its container business, warned the port experts.

The experts suggested that while allowing a division of labor, Hong Kong and Shanghai may cooperate by acting as international shipping centers in their respective geographic regions.

It is estimated that within 10 years, the combined container handling capacity of sea ports in China and other east Asian countries will increase by a large margin, and Hong Kong will be able to handle around 25 million to 28 million TEUs of containers in the forthcoming 15 years.

"We hope Hong Kong and Yangshan can realize a win-win deal on both sides in the course of China's sustained and fast economic development process," the Chinese port experts added.

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