China will encourage the development as soon as possible of several
giant package distribution and delivery system firms and further
open up the logistics industry to foreign investors. Domestic
logistics enterprises are also encouraged to strengthen cooperation
with both domestic and foreign investors and grasp global market
stakes to meet the demands of growing international trade and
globalization after the country joins WTO at the end of this year.
Under the rules of the World Trade
Organization (WTO), the country hopes to open its service and
logistics market in three years.
Logistics is a term used to describe the process of delivery of a
product from the manufacturer to the consumer that includes
transportation, storage and distribution. Today the industry has
grown to integrate logistics services with information and
financing.
Despite an overall slowdown in the world's economic growth, China's
sustained momentum of development and high market demand have
provided a good opportunity for overseas investors to access its
logistic market. The logistic industry will benefit more from
foreign investment, including financing, technology and management,
and with this, the industry will play a more important role in
China's economy.
The industry is expected to be of great help to the country's
national economic growth, since a large number of businesses,
especially state-owned enterprises, are bogged down by poor
management and inefficient logistics, resulting in high production
costs.
Among China's 450 large and medium-sized industrial enterprises, 45
percent plan to select new agents to handle logistics within the
next two years, and 75 percent want to establish business relations
with modern logistics companies, according to recent statistics
issued by the Storage Industry Association.
Companies that have improved their logistic delivery and storage
systems usually see profits rise. They include such companies as
Tsingdao Beer Group and Haier Group in East China's Shandong
Province.
After reforming its logistic system, Tsingdao Beer has been able to
save about US$3.9 million (32 million yuan a year).
More and more enterprises have come to realize that with economic
globalization, competition lies not only in the performance or
quality of their products, but also in their logistics
capacity.
China's logistics market is estimated at around US$215 billion
(1.78 trillion yuan). The industry is expected to become a new
source of profits for Chinese firms.
Logistics companies in the country must move fast to utilize the
final three-year protection period after China’s entry into the
World Trade Organization if they are to be able to survive when
foreign logistic giants arrive.
The State Postal Bureau
(China Post) aims to become the country's biggest logistics
provider, supported by its far-reaching network and decades of
delivery experience, but it needs to restructure management systems
and business operations in order to become a modern logistics
provider.
At
present, few domestic logistics giants exist in China capable of
competing with foreign companies, though the industry has had a
rapid development in recent years. Many foreign logistics companies
have dominated the market because of a better reputation compared
with their Chinese competitors. Foreign logistics companies are
already eyeing the enormous potential of China's market, and are
investing heavily in China.
Siemens’ operations in logistics and production in China began in
the early 1980s. The company now enjoys a strong professional
presence in China's electronics assembly and postal automation
industries.
Danish shipping giant A.P. Moller Maersk Group has set up a
national distribution center in the western suburbs of Shanghai to
provide logistic services ranging from procurement and warehousing
to transportation.
Singapore-based APL Logistics, one of the world's leading companies
in logistic sector, has joined hands with two Chinese companies to
tap the logistic market in China. APL Logistics has set up branches
in seven Chinese coastal cities including Shanghai, Dalian,
Tianjin, Qingdao, Xiamen, Shenzhen and Nanjing. Another five
branches are expected to open in the coming two years.
Coastal cities including Shanghai, Tianjin and Shenzhen have listed
logistics as a rising industry in the 21st century. Meanwhile,
experts say China should enhance cooperation with international
companies to improve its logistic management.
China’s government encourages Chinese companies to increase profits
by improving management and efficiency in the purchase,
transportation, storage and delivery of materials and products.
(china.org.cn edited by Shan Xingmei from Xinhua News Agency
reports )