A catalyst in oiling wheels of industry

Meishan is proving to be a catalyst in oiling the wheels of industry in the long-term Belt and Road Initiative.

CITIC Gangtong International Logistics Co Ltd, one of the biggest car importing service companies registered in the Ningbo Meishan Free Trade Port Zone, has been approved by the State Council to transfer imported cars. It is also part of a local policy to support the Belt and Road Initiative, a China-proposed action plan to boost cooperation and communication among more than 60 countries and regions.

As a core area for Ningbo to pilot the initiative, Meishan is being developed to be a free trade island with efficient custom clearance.

“It might take a month for a company to finish all clearance procedures before they get imported cars in Tianjin Port, but it takes only a week in Meishan. Therefore, our business is boosted here as we imported over 6,000 cars in 2017, 5,000 of them were sold with a turnover of 2.5 billion yuan (US$389 million), up 360 percent from a year earlier,” said Lu Zhuojun, deputy general manager of CITIC.

The company mainly imports cars from the Middle East, Europe and North America while most of the exporters come from countries involving the Belt and Road Initiative, including the Sultanate of Oman, Kingdom of Saudi Arabia, UK and Germany.

The company mainly imports cars from the Middle East, Europe and North America while most of the exporters come from countries involving the Belt and Road Initiative, including the Sultanate of Oman, Kingdom of Saudi Arabia, UK and Germany.

Zhejiang government approved Ningbo, in September 2017, to be a pioneer in the Belt and Road Initiative. A general development plan by Zhejiang Provincial Development and Reform Commission was issued the same month, saying Ningbo is dedicated to be a model site by coordinating its advantageous resources, including port, foreign trade and a private sector-dominated economy.

Ningbo exported a total of 116.04 billion yuan worth of products to countries covered by the Belt and Road Initiative between January and November last year, up 16 percent from a year earlier. Those countries are emerging to reduce the market shares occupied by traditional importers, including the European Union and Japan, according to the Ningbo Commission of Commerce.

Furthermore, Ningbo’s private enterprises have invested in over 100 countries and over 20 percent of the investment went to countries and regions covered by the initiative.

At a key point of the Maritime Silk Road, Ningbo aims to develop cooperation with areas involving the initiative and will focus on five aspects, including shipping and logistics, investment and trade, industrial and technological cooperation, finance and insurance service and cultural communication.

By the end of 2020, the annual foreign trade volume between Ningbo and countries and regions involving the initiative is expected to reach US$40 billion. The annual growth rate of e-commerce cross-border trade volume will be 20 percent, five overseas industrial parks will be built and the sister-city diplomatic relationship with 100 cities will be forged.

Ningbo has already made a global layout in the shipping and logistics service by opening new routes and releasing a shipping index as a useful reference for the development of the business. Besides, the markets covered by Belt and Road Initiative have been boosted thanks to the city’s efforts in both “bringing in” and “going out.”

Shipping and logistics

Ningbo is expanding a shipping connection between Ningbo Zhoushan Port, the world’s busiest port in terms of cargo tonnage, and the areas involving the Belt and Road in its effort to become a global hub. In addition, Ningbo Shipping Exchange released a Maritime Silk Road Index (MSRI), providing an important reference for the shipping and trade business along the Belt and Road.

A total of five new shipping routes opened last year connecting Ningbo Zhoushan Port and the areas covered by the initiative, taking the total number up to 86, while over 5,000 voyages were made last year. Among them, 29 routes linked the port with Southeast Asia, while the others connected with the Netherlands, India, Russia, Germany, France, Greece, Spain, Italy, Israel and Turkey.

Besides shipping, sea-railway transportation also connected areas from the port along the Belt and Road, including Central Asia, Russia and Eastern Europe, boosting the transportation volume in these areas.

“The container volume transported between the port and countries involving the Belt and Road Initiative increased by 16 percent year on year to reach 10 million TEUs (20-foot equivalent unit) in 2017, accounting for around 40 percent of the whole container volume transported by the port,” said Jiang Wei, secretary of the board of directors of the Ningbo Zhoushan Port Co Ltd.

Based on the increasing connection of transportation, Ningbo is trying to be a helpful coordinator by releasing MSRI as a reference of the shipping and trade market.

“In the future, we will improve the accuracy of MSRI to make it more scientific as a reference for predicting the market, which can facilitate the trade and marine economy development in the world,” said Ningbo Mayor Qiu Dongyao.

Consisting of Ningbo Containerized Freight Index (NCFI), Maritime Silk Road Trade Index (STI) and Ningbo Shipping Economic Index (NSEI), MSRI is also recognized in the international market as NCFI is simultaneously presented on the website of London’s Baltic Exchange.

The NCFI, covering shipping information on four routes from Ningbo to Europe, the Middle East, West and East Mediterranean, can help shipping and foreign trade companies have a clear understanding of the trend in the market of containerized freight.

“Logistics companies like us really need to have an overall understanding about the fluctuation of the freight price so that we can make wise delivery plans to save costs. NCFI provides a useful reference for us to judge the market and I think the more frequently the index is updated, the more helpful it will be,” said Star Wang, deputy general manager of Jet Express International Freight Forwarding Co Ltd, which is based in Ningbo.

In addition, STI is updated every month and demonstrates the fluctuation of both import and export business in areas of Southeast Asia, South Asia, Central and Eastern Europe and Middle East. NSEI is updated monthly to illustrate the prosperity of shipping industry and the confidence of shipping companies in China.

Convenient trade

As a global hub, Ningbo also plays an active role in promoting international trade by bringing a foreign company’s products in and helping Chinese companies sell goods abroad. The city now focuses on opening the markets related with the Belt and Road Initiative, including Central and Eastern European countries (CEEC) and the Republic of Benin in West Africa.

Ningbo has held China-CEEC Investment and Trade Expo for three years and a new bureau was founded by Ningbo Commission of Commerce in 2017 to specialize in organizing the expo and promoting cooperation between China and Poland, Hungary, Czech Republic, Slovakia, Slovenia, Romania, Bulgaria, Estonia, Latvia, Macedonia, Montenegro, Serbia, Albania, Lithuania, Bosnia and Herzegovina, and Croatia.

The annual expo brought CEEC’s products in and helped them open a Chinese market as Ningbo’s import volume from CEEC increased by 70.4 percent year on year between January and October in 2017, according to Ningbo Commission of Commerce.

CEEC’s natural and organic products such as wine and food are popular in the Chinese market.

According to Ningbo Customs, Ningbo imported 501,000 liters of wine from CEEC in 2017, up 31 percent from a year earlier and valued 10.642 million yuan. The import volume from Romania, Slovakia and Hungary are the most, increased by 58 percent, 66.3 percent and 28.9 percent year on year, respectively, to reach 220,000 liters, 104,000 liters and 56,000 liters in 2017.

Ningbo also encourages Chinese companies to explore markets in the Republic of Benin, which is an important gateway to West Africa, and expos featuring Chinese commodities were also held there to boost trade.

Benin Chinese Economic Development Center, covering 9,700 square meters in Cotonou, the largest city and economic center of Benin, is a platform operated by Ningbo to help Chinese companies sell goods in Benin.

Benin (West Africa) Chinese Commodities Fair has been annually held in the center since 2008, except for the cancelation in 2014 because of the Ebola virus.

The expo held in 2017 attracted over 8,000 buyers from West Africa to make deals valued at US$46 million with 46 Chinese companies, according to Zhejiang Teams International Economic and Technical Cooperation Co Ltd, the operator of the center.

So far, the center has attracted 20 Chinese companies exhibiting their products there. Most of them are suppliers or manufacturers of machinery and electronics products, stationery and home appliances and they all set up warehouses in Benin as their products are popular with Beninese people.

“The market in Benin and the whole West Africa is developing and many of people’s daily goods are imported. Chinese products are popular in the market, such as machinery and electronic products,” said Ni Guoming, general manager of Zhejiang Teams International Economic and Technical Cooperation Co Ltd.