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China's first airport-based bonded logistics center will begin operation in the first quarter of next year and is expected to make Beijing an important Northeast Asian air cargo transportation hub.

The bonded area is a key part of a 3-square-kilometer airport logistics park to be completed by the end of next year. The Beijing Airport City Logistics Park will involve a total investment of 3.6 billion yuan (US$456 million).

"The logistics park, together with the ongoing third expansion of the Beijing airport, will serve the 2008 Beijing Olympic Games," said Desmond Shum, chief executive officer of the Airport City Logistics Park Co Ltd (ACL). ACL is responsible for planning, developing and managing the park.

The logistics park is expected to improve the cargo transport competitiveness of the Beijing Capital International Airport, challenging South Korea's Incheon and Tokyo's Narita airports.

"Beijing could rank No. 1 in terms of air transport connectivity in major airports of Northeast Asia, but it falls behind airports in South Korea and Japan in terms of cargo transportation," said Shum, indicating the main reasons are scattered logistics-related services, complicated customs clearance procedures and labor inefficiency.

South Korea's Incheon International Airport handled 2.15 million tons of cargo last year and was ranked the fifth-largest cargo airport by the Airports Council International. But more than half of the cargo, of which China was a major source, did not come from South Korea and was transferred to other parts of the world via Incheon.

Beijing airport transported 782,066 tons of cargo last year.

"We want to bring that cargo back," Shum said.

The logistics park, located at the north end of the airport's second runway, has five functional areas: a bonded zone, cargo terminals, an express cargo center, an import/export air cargo customs surveillance zone and a comprehensive office complex.

The bonded zone, the first to begin operation, is like a free port in which imported goods can be held or processed free of customs duties before they are re-exported.

The logistics park will provide "one-stop customs clearance" for companies doing international trade, ACL said. It aims to help goods flow more smoothly by reducing red tape and setting up efficient co-ordination mechanisms among foreign trade-related agencies in customs, quarantine, warehousing, transportation and financial services.

Shum said the Chinese government's initiative to create a new economic growth engine in north China rivaling Shenzhen and Shanghai brings unprecedented opportunities and will generate huge cargo traffic for Beijing airport.

Analysts said the airport logistics park would serve as an engine for the economic growth of Beijing.

"The logistics park would directly create 7.4 billion yuan (US$937 million) in gross domestic product (GDP) for Beijing and the airport-related economy would contribute 5.49 percent of Beijing's GDP in 2015," said Zhang Junkuo, a senior researcher at the Development Research Center of the State Council.

ACL is a joint venture between Capital Airports Holding Co (CAH) and the Shunyi district government.

CAH, the biggest shareholder in Beijing airport, is China's largest airport group.

(China Daily October 21, 2006)