China's largest shipping company says it is ready to ride on the crest of the WTO wave. And while less efficient firms may drown under the force of market competition, China Ocean Shipping Company (COSCO), which controls around 70 per cent of the nation's shipping freight capacity, says it can meet the challenges that China's expected World Trade Organization (WTO) entry will bring.
China's membership in the WTO will greatly stimulate its foreign trade and will also fuel changes in the domestic shipping industry, Sun Jiakang, COSCO spokesman, said.
Foreign trade ocean shipping capacity in China is projected to reach 656 million tons in 2005, compared to 383 million tons in 1998.
"It's a golden chance for home carriers," Sun said.
An increase in the volume of freight handled by domestic ports will also promote the company's overseas shipping agent business.
With more than 1,500 shipping agents across the world, COSCO will take advantage of its broad business network to provide better services for clients, Sun said.
The company will also enhance its co-operation with foreign cargo shippers, which should lead to lower freight costs and better services.
However, China's entry into the WTO also means fiercer competition from abroad for domestic shippers, Sun said.
The shipping agent sector faces the biggest challenge.
One of the prices of China's entry into the WTO is a domestic shipping agent market open to foreign counterparts, Sun said. Presently, foreign shippers are still limited in this aspect of business in China.
To win customers from foreign counterparts, COSCO said it will take a broad-minded view of the market.
"We will focus on the establishment of a market-oriented and customer-oriented marketing system and managing mode," Sun said.
He said the company will try to improve its after-sales service, currently a weak point.
The company is also upgrading its information technology and e-commerce services.
COSCO is trying to become the model of a modern corporation, he said. Its effort to build a name brand in the past few years will also cushion it from some of the competition.
However, another problem that may arise from the arrival of foreign companies on the domestic market could be a "brain drain" of top employees.
To curb the problem, COSCO will focus on human resources in its future operations.
(China Daily)
