The municipality of Jiangmen has a fascinating history, and to say it has “been through the wars” would be an understatement. Like most of the Greater Bay Area, it has had its ups and downs. Yet its history is unique as a once-proud node on the Maritime Silk Road, a home to many overseas Chinese who traded throughout Southeast Asia in the days before Hong Kong and Canton became the powerhouses they are today. Once one of the region’s richest areas, today the GBA’s westernmost city is, like the easternmost city of Huizhou, finding itself playing catch-up to the rest in economic development.Continue reading Jiangmen: Mission to restore faded glory
As recent trade data has shown, Dongguan’s relative resilience in the midst of the US-China trade war has been intriguing. One key reason for it has emerged: the creation of special new zones for duty-free trade processing, known as bonded-logistics and cross-border e-commerce zones.
Last year, bonded-logistic zones handled RMB217.5 billion in trade, up 17.7% compared with 2017. The rising star, however, was cross-border e-commerce, which saw RMB37 billion of trade processed, up 133%, ranking it first in the country. Dongguan now has 10 cross-border e-commerce parks, offering a range of services to companies that set up there, including logistics support. They also have a number of incubators for start-up companies.
These are not zones with barbed-wire fences. A prime example is the Humen Port Integrated Bonded Zone. Although only officially upgraded from a “bonded logistics center” last October, the zone handled 241,000 imported packages during the first four months of this year, reaching 83% of the total recorded the whole of last year.
Dongguan has consistently ranked in the country’s top 10 trading municipalities. Today it is fifth for overall trade volumes, fourth in exports and third in “foreign trade competitiveness”, according to local media. The government is also setting up funds and issuing policies to develop an industrial cluster of e-commerce, including building a well-rounded supply chain, establishing a B2B supervision system and providing funds for enterprises to set up overseas storage bases.
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Guangzhou’s airport is not just an airport. It is an Airport Economic Hub that includes a train station and a container station. This economic hub recently launched 26 projects, expected to cost RMB30 billion, to speed up the construction of a Greater Bay Area “cross-border e-commerce transport hub”.
As can be imagined, the projects have dull-sounding names: 10 are being done together with airlines and “logistics ecommerce heavyweights” such as Alibaba and JD.com, to build production facilities and a distribution center. Others include an aircraft maintenance base, a flight simulation R&D center, and a manufacturing and training center. These projects are expected to significantly boost the throughput of commodities at the Guangzhou Airport Economic Hub.
The airport zone’s management has not been sitting around on its hands until now, of course. It had previously launched e-commerce initiatives with companies such as Suning, Vipshop and SF Express, involving investment of more than RMB15 billion, and these will come online gradually in the next three years. The second phase of the Airport Free Trade Zone, meanwhile, will add one million square meters of storage space for overseas logistics. The bonded zone will add more than 200,000 square meters of e-commerce related space and facilities.
The Guangzhou Airport Economic Hub, which includes Guangzhou North Railway Station and the Datian Railway Container Station, is expected to reach RMB100 billion of total goods throughput within the next two years. It is currently on a tear, thanks to some liberal policymaking by the local and provincial governments. The bonded zone has the same regulation as a Free Trade Zone and has so far attracted more than 1,000 enterprises. Total trade value of cross-border e-commerce goods alone last year was more than RMB8 billion, double what it did in 2017, ranking first nationwide for the fifth year in a row.
The bonded zone is known for a highly efficient Customs clearance procedure and low operating costs. Last year, the total Customs clearance time for imports shortened 29% while the time for exports shortened 21.42%, ranking first and second compared with other major airport hubs in China.
The Administration Committee of Guangzhou Airport Economic Hub plans to build the entire airport zone into a “commercial circle” with all the functions of aviation transport, exhibition, commerce and – yes, dear reader, you guessed it – cultural tourism.
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George Yeo, head of Kerry Logistics, knows the art of diplomacy. The former Singaporean foreign minister now heads one of the Greater Bay Area’s biggest logistics companies, Kerry Logistics. Yet it is clear in this feature on SCMP that he has decided it’s time to speak some hard truths. Here is an excerpt:
“The details are very important. Right now we have the broad framework and the general idea [of the plan]. We have to go down now to the nitty gritty, to the specific details,” Yeo said.
“There is still very little cargo going across because the rules are not clearly settled with the customs authorities. I am sure it will be resolved within a few months. There are practical details about how to clear containers and where to clear them and the smoother it is the better.”
“The clearer the rules are the more the trucks that carry such containers can pass through with minimum friction.”
Read the full story here