A lack of good harbor facilities is hampering China's development, and major international funding is needed to provide facilities that will end congestion and bottlenecks.
This is the assessment of the Hongkong and Shanghai Banking Corp. in a review of China's port inadequacies, which it says are holding back economic growth. In a briefing paper, the bank says China has finally mapped out a long-term port development program."This is intended to create 600 deep-water berths at the country's 27 major ports by the year 2000. There are about 250 at present. The program also encompasses expansion and renovation of six major northern ports - which will take up 38 percent of all state investment - containerization of ports in the south and east and development of support transportation inland.
To create a truly efficient port system, vast improvements are needed in cargo handling facilities of China's hinterlands," says the bank review. Roads and bridges unable to carry container-laden lorries impose a limit on growth."
In the current five-year plan (1986-90), some US$2.9 billion - a 22 percent increase over the previous plan - was earmarked for the construction of 120 deep-water berths and 80 smaller ones.
By 1990, China expects to have improved handling capacity by 220 million tons, double the amount added within the 1981-85 plan period. About 87 million tons of that will be at ports that specialize in coal shipments, says the review. And 40 million tons will be added to inland ports along the Yangtze River.
Containerization is only six years old in China. Eight of the major ports currently have these facilities, and 315,000 TEUs (20-foot equivalent units) were handled in 1986. Ten new container berths are expected to be completed by 1990.
China also plans to set up four international container transport centers - at Shanghai, Dalian, Tianjin and Huangpu, which is close to Hong Kong.
The bank believes China does not have the financial resources to handle the program alone. A lack of funds is the biggest problem, it says. But in general, foreign companies are reluctant to invest in the port development sector because of the problem of remitting funds in foreign exchange.
The review says that potential investors point to China's slow and centralized management, poor planning, lack of feasibility studies and general inefficiency, which has landed harbor business in Hong Kong's lap.
Foreign equipment, foreign design, consultancy and construction services will have to be purchased in order to carry the program through. The foreign funding and assistance may come from the World Bank, Japanese loans and investment by shipping lines in return for preferential service and through Sino-foreign equity joint ventures.