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Shipping Review
The Reform and Opening up in Shanghai Port
Date:2012-09-19 Readers:

Shanghai Port has accomplished a cargo throughput of 72,758 tons and a container throughput of 31,739,000 TEUs in 2011, making up 8.11% of China’s total cargo throughput and 19.35% of China’s total container throughput respectively. The total volume of exports and imports at Shanghai Port reached $ 1065.49 billion in 2011, constituting 29.3% of China’s total exports and imports.


1. The role Shanghai port plays in the national economy and regional economy in China
Delving into the development of world’s top 10 international metropolises, we can see that ports account for their development and prosperity. Ports and shipping greatly drive the national and regional economy though the direct effect is limited. Take Shanghai Port as an example, it is located at the intersection where east to west transport channel of the Yangtze River and north to south transport channel of sea meet. At the end of 2011, there are more than 10,000 shipping enterprises and related enterprises, 8,367 of which are engaged in shipping and service business with direct and indirect job opportunities of 800-850 thousands, and added value of 120-130 billion yuan, constituting about 7% of total employment and 8% of Shanghai’s GAP in 2011 respectively. Taking account of indirect contribution, the employment figure and added value would be double, about 14% and 16% respectively. Since Yangshan Deepwater Port was built at the end of 2005 and the development of Shanghai International Shipping Center was promoted as China's national strategy in State Council Document No.19, the infrastructure of Shanghai Port experienced a great improvement, the real economy has marked a significant growth, and the development of intermodal transportation system and shipping service system has made new breakthroughs. However, compared with ports in developed countries, the Port of Shanghai still lags behind in high-level shipping service, especially in shipping finance, shipping economy, maritime arbitration and shipping consultation, which are still in their infancy.


2. The distinctive function of ports and shipping in the development of national economy
From its legal system and judiciary organizations, shipping is a special industry. As a capital and technology intensive industry with high risks and costs, shipping industry is endowed with a unique development and operation model quite different from other industrial enterprises. It is internationally accepted to take necessary means such as low-rate financing, maritime insurance and adopt supportive policy of low tax and low tax rate for shipping companies and crews. The development of ports, shipping and shipping center lies its importance not in the added value itself but in the major impetus to national and regional ecomomy.


3. Strengthen the construction of Shanghai International Shipping Center by seizing the opportunities of American financial crisis and European debt crisis
The world’s economic center is shifting to Asian and especially to China since the occurrence of American financial crisis and European debt crisis. Shanghai should seize this historical opportunities and utilize proven experience from developed countries to boost the construction of Shanghai International Shipping Center.


First, the importance and distinctiveness of SISI should be further stressed as one national policy, and the bottleneck problems during the development should be resolved from the national level. Owing to its importance and distinctiveness, the construction of Shanghai International Shipping center should be stressed as a national strategy. The national government should take the responsibility to resolve bottleneck problems during the construction.


Second, as indicated in State Council No. 19 Document, the policy about exploring and establishing the comprehensive experimental area should be put into practice for international shipping development with a huge leap in the fields like area coverage, function, institution and content of the experimental area. The area coverage (both from the perspective of space and policy) is the proof of real existence. The ideal way to carry out this policy is to build the experimental area into a mini version of Hong Kong based on experiences of other international shipping center construction.


Third, the port environment should be further improved. The medium and low level of shipping service is as important as that of high level. Therefore, the following measures should be taken: 1. reform the customs supervision system of Yangshan free trade port area, and further fulfill the policy of “inside the territory while outside the customs” to create a real free trade area where cargo transfering requires no inspection or customs declaration. 2. deepen the reform of customs clearance system, and list the inspection fee for containers at port in the national financial budget instead of being charged from the cargo owner. 3. Allow easy access to e-port and lower the standard of transfer fee according to the Term 6 of Notification of Accelerating the Establishment of E-port issued by the general office of the China's state council that the local government must strictly manage the fee charging without seeking for profits or bringing extra burden to enterprises”. The development of shipping center is a national policy as well as a national duty. Stated-owned enterprises and joint-venture enterprises should shoulder the responsibility to promote the construction of Shanghai International Shipping Center.


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