28% Growth in the Logistics Sector in the First Half of 2008     

According to a statement from the Ministry of Communication, in spite of the snowstorm and the Wenchuan earthquake, the logistics sector in China maintained a high growth in the first half of 2008. The total value of logistics reached RMB43.29 trillion, an increase of 28.1% over the same period of last year, with 2.5 percentage points faster growth. Due to the frequent occurrences of major natural disasters and the slowing growth of international trade volume, the growth of the logistics business volume was reduced. The drastic price rise of fuels and raw materials also led to an increase of the intermediate input. The added value of logistics was RMB896.2 billion, an increase of 16.1% over the same period of last year, and growth was 1.1 percentage points lower. The added value of logistics accounted for 6.9% of the GDP, being 0.2 percentage points lower than the same period of last year. The total expenditure of logistics was RMB2 403.2 billion in the first half of 2008, an increase of 19.8% over the same period of last year and the growth was 3.6 percentage points higher. The fixed-asset investment in sectors related to logistics was RMB571.3 billion in the first half of 2008, an increase of 9.6% over the same period of last year and growth was 11.1 percentage points lower. The main reason was the drastic slowdown in the growth of investment in the communication and transportation sector.
   It is pointed out in the "Outline for the Eleventh Five-year Program" that efforts should be made to "vigorously develop modern logistics and disseminate modern logistics management technologies to realize the standardization and informatization of logistics and the modernization of technologies and equipment." The institutional reform in monopolized logistics sectors such as the postal, railway and civil aviation sectors has already made breakthroughs. The logistics sector is more open. There are also favorable tax policies and improved customs clearance conditions. Environments for the development of the logistics sector are therefore making constant improvements. A further rapid development of the modern logistics sector will be promoted and greater investment opportunities will be brought to enterprises related to the logistics sector.
   Analysts think that investment opportunities in China's logistics sector are mainly in the hands of major logistics enterprises with integrated advantages such as COSCO Logistics, China Shipping Logistics, China National Materials Storage & Transportation, China Railway Express, China Oil Storage & Transportation and China National Postal Logistics. There are also specialized logistics enterprises whose clients are mainly concentrated in IT, chemical, household electric appliances, automotive, daily articles, construction materials, pharmaceuticals, tobacco, agricultural and general merchandize sectors; and regional logistics enterprises, especially in eastern areas with advanced economy and central areas with communication hubs, as well as logistics enterprises with special advantages.
   As great quantities of foreign plants have been constructed in China, more and more overseas chemical logistics companies such as Stolt, Heung-A Shipping, ViaMar, Odfjell have set up offices or subsidiaries in China. NYK, a large ocean shipping and logistics group of Japan, has opened a dispatching and storage center in Shanghai to supply components and parts to Yamaha motorcycle plants. Yusen Air & Sea Service (China), a subsidiary of NYK, has set up an office in Chengdu, one of the IT, automobile and semiconductor centers in China. It is the fourth office opened by Yusen Air & Sea Service. The other three are located in Xi'an, Chongqing and Wuhan.
   In October 2007 Eimskip of Iceland started its logistics business in Qingdao in collaboration with Shandong Luyi Container Shipping Co., Ltd. Its cold store has started operation. The company also plans to construct another cold store in Qingdao.
   In 1986 DHL entered the logistics sector of China in the form of joint venture. It has established 82 subsidiaries in China today. There are more than 7 100 employees and its services cover 401 main cities in China.
   UPS has brought logistics banking business into China through the cooperation between its subsidiary UPSCAPITAL and Chinese banks and become the first international logistics express mail company attempting to establish itself in the logistics banking sector in China.
   The Logistics Association China today has been set up to integrate logistics resources, expand comprehensive logistics services and promote the development of the logistics sector in China. Companies specialized in chemical logistics such as Sinochem Corporation and S&W International Chemical Logistics Ltd. have set themselves up in chemical industry parks. Many large chemical groups such as Sinopec Group, CNPC and Shanghai Huayi also have their own logistics business units.