Logistics Is Booming In China — But Not Where You Think
When it’s usually the coastal cities making a strategic spot for logistics and shipping industry, today will not really be the case as now even inland cities can act as a bridge between exporting and importing countries, due to the space restraint on the former. More people and land, translates to potential for development and the government are doing just that.
As of the writing, the cities are Xi’an, Chengdu, and Zhengzhou, acting as a bridge between the international countries and domestic regions at the same time, thanks to the development of warehouses and transport infrastructure to keep up with the fast-pace development of the said cities and eventually positioning them as the main hub for commercial and distribution.
Current Woes In Inland Logistic Chain
Inland cities have long suffered from lower talent supply, lacking in infrastructure, technology and visibility, limitations from authorities as well as opportunity to expand to other areas, unlike coastal cities where high real estate and labor costs making it an attractive spot for business.
Of course, the cost of ocean frieght itself is one of the key factor in deciding that the spot is the best for import export business by being the cheapest; compared with the alternative of railways that doesn’t hold up as many goods as shipping ships able to, what more with air freight which can be costly to export.
Plus, taking in account with the government regulators and service provided by the train company making it difficult to establish a hub in inland cities.
Not anymore though. The support from the government (both central and regional) in boosting overall China economy in response with the current market movement have change the whole game altogether.
3 Top Emerging Inland Chinese Hubs
Xi’an
Being in the middle of China, the city opened its logistic hub in 2008 and offering a free-trade zone and rail link connecting with western Europe despite constrains in their geographical features.
The city currently attracting R&D sector, manufacturers, and e-commerce companies to invest in the city by combining sea, air, and rail services, and building foundations along the way . This move positions themselves as the city for manufacturing and logistic industries, as well as for ‘One Belt, One Road Initiative’.
Of course, the railway has always been the primary focus, as the city is also serves as the China’s gateway to the Silk Road in ancient times. And now the city is cooperating with Kazakhstan as the starting point for exporting (before other countries that would soon follow) with the pair have signed agreement for trade in grain and oil seed in 2017.
Zhengzhou
The city in Henan province first serves as a manufacturer of iPhones since 2010, and from there the city became the first economic zone and one of the fastest growing airports for both cargo and commercial.
Zhengzhou used to be associated with Foxconn, the largest company and exporter in “the workshop of the world” and currently are expanding the city aggressively inland, where the workers rate are lower and plentiful.
The city routes to Europe accounts for 30% of export consisting of electronics (of course), industrial robotics, as well as auto parts, with main exports include textiles, processed meats, beverages, and fertiliser.
Chengdu
The large city in the Sichuan province is currently boosting their rail and air service to attract growth in the tech sector and add on the good news with notable logistics company such as DHL, Rail cargo Group and Lufthansa Cargo also extending their services to Chengdu.
