Nazery Khalid is a Research Fellow at the Maritime Institute of Malaysia. This is a revised and expanded version of an article that appeared in China Brief, March 29, 2006. Most of is is in the Asia-Pacific Journal .
China ‘s maritime sector is growing from strength to strength. From securing a 5.5% share of world fleet (in DWT terms) in early 2004, it increased its share to 6.77% in early 2005 and has continued its surge subsequently. Maritime infrastructure in China continues to be developed at a breakneck pace in step with ever-increasing trade. Its ports are continuously expanding and engaging in strategic alliances to widen their connectivity.
Underlining this tremendous growth, seven Chinese ports are in the list of the world’s top 20 container terminals. Mainland China-based COSCO and China Shipping are two of the world’s top ten container service operators in terms of fleet size and total shipboard capacity (TEUs).
China’s maritime intent is highlighted by the focus on maritime infrastructure development in its 11th Five-Year Development Plan. This plan, impressive in its scope and its long-term perspective, outlines the creation of two new port clusters in Fujian and Hainan, in addition to existing ones in Shanghai, Tianjin and Shenzhen. The plan is part of the effort to complement the national aspiration to enhance development by facilitating international trade.
Such relentless efforts underscore China’s seriousness about upgrading its transport networks and infrastructure to match its economic growth. China’s three biggest ports in Shanghai, Tianjin and Shenzhen are already among the world’s largest, and can be expected to soar further up the list of major maritime powerhouses.
China ’s maritime strengths and port development reflect the fact that a majority of its international trade is seaborne.
China has been ranked as the world’s third largest trading country and fourth most important maritime state on the basis of the size of its merchant fleet and its 6.77% contribution to the world’s total tonnage (U.S.-China Business Council Report, November 20, 2005). At the end of 2004, it commanded a 6.2% share of world trade generated in terms of value (UNCTAD, Review of Maritime Transport, 2005).
The explosion in its international trade has spurred China’s planners to accelerate the expansion of port capacity to support trade and container traffic growth. Today, as a result of the economic boom across Asia, galvanized by growing trade with China, 14 of the world’s top 20 container terminals are Asian-based. Seven of these terminals are located in China, underlining the rapid growth of its trade and economy and its growing clout as a maritime power (UNCTAD, 2005).
The growth of Chinese ports has displaced established ports like Kobe and Yokohama from the list of the world’s top twenty. Moreover, even Hong Kong, the world’s busiest port since 1992 and a beneficiary of the China boom, has been growing at a lower rate than Shanghai and Shenzhen, which experienced increased throughput more than threefold from 1999 to 2004.
Leading the growth of Chinese ports is Ningbo, which notched the highest percentage gain in 2004. The port has been growing at an astounding average growth in TEU [1] traffic rate of 44% for the last six years (China Business Review, 2005). Shanghai is projected to be the biggest hub port in East Asia and to serve as China’s distribution and logistics services base for global trade. The concentration of cargo base and increasing foreign direct investment (FDI) has resulted in Shanghai outpacing other areas. It is projected to handle a capacity of 25 million TEUs by 2010, double the volume handled in 2004 (China Daily, February 25, 2004).