Shanghai Celebrates Giant Port Amid Worries of
Overcapacity
SHANGHAI In many ways, Shanghai's new port is a work of
wonder.
Built amid a cluster of craggy islands, Yangshan Deepwater Port is
connected to Shanghai by a six-lane bridge that meanders across 20
miles of water. The government has not disclosed the project's
cost, but local media put it at about $1 billion.
More than 26,000 people had a hand in its design and construction.
It took just three years to complete the bridge and a container
terminal that covers 400 acres of landfill conjoining two
islands.
"I can't think of anything remotely like this in the world," said
George Goldman, managing director of the shipping line APL China,
as he stood in the drizzling rain in December watching government
leaders inaugurate the first five of at least 30 berths planned for
Yangshan.
Yet for all of its engineering ingenuity, Yangshan has left many
shipping experts questioning whether it's too much of a good
thing.
Shanghai is already the world's third-largest container port.
Officials hope that within a few years, Yangshan will double
Shanghai's cargo-loading capacity to 30 million 20-foot containers
a year. That would put it ahead of Hong Kong and would be more than
double the volume currently handled at the Long Beach and Los
Angeles port complex, the largest in North America.
But Shanghai is competing with numerous other port cities in China
and throughout Asia for prominence as international shipping
centers.
While booming exports of Chinese-made textiles, appliances and
electronics have clogged the ports of Southern California, China's
answer to the surge in traffic has been to enlarge its
harbors.
Along China's east coast, from Shenzhen in the south to Dalian in
the north, port cities are aggressively expanding the number of
berths and container facilities.
"No one is willing to be the other's feeder port," said Cai Meiyi,
vice chairman of Shanghai Port Industrial Assn. "All the local
governors want to show their political achievement."
Shanghai faces its most direct threat from Ningbo, a rapidly
growing city in Zhejiang province about 100 miles to the south.
With its natural deepwater harbor, Ningbo has made the most of the
industrialization in the Yangtze River Delta region and is now
building three bridges over Hangzhou Bay that would link its local
ports to the mainland.
"Ningbo is working day and night to compete with Shanghai," said
Yang Jianwen, an economist with the Shanghai Academy of Social
Sciences. "Ningbo's aim is very clear: to contend with Shanghai for
cargos."
Shanghai officials downplay the regional rivalry and note that
Zhejiang leaders were on hand for Yangshan's opening ceremonies.
Also in attendance was Huang Ju, a former Shanghai mayor who now
holds the title of China's vice premier. Support from the central
government could play a key role in reducing excessive regional
competition and determining whether Shanghai will become the
nation's international transportation hub.
But Yangshan's rise also has touched off a scramble in East
Asia.
Shanghai's long-existing port near the city sits at the mouth of
the Yangtze River and has a depth of less than 25 feet, too shallow
for the newest generation of super containerships to dock.
Yangshan has twice the water depth, enabling it to take goods from
smaller ports and load them to giant vessels bound for Europe and
the U.S. West Coast. This so-called international transshipment
market is now dominated by ports in Hong Kong, Singapore and South
Korea all of which are racing to boost their capabilities.
The port of Pusan in South Korea has been growing briskly in recent
years, thanks in part to the overflow of goods coming from China
that are then routed overseas. Pusan relies on transshipments for
40% of its containers, but half of that could be up for grabs now,
said Cho Sam Hyun of the Pusan Development Institute.
Pusan knows it will be tough to compete with Yangshan, given
China's cheaper labor rates. So in addition to investing $6.7
billion to add 30 berths to its harbor, Pusan is subsidizing rent
for companies moving into the port and giving discounts to
high-volume shipping lines.
"The cost difference is a problem," said Cho, although he added
that Pusan and Shanghai could both benefit if they cooperate with
each other and cargo shipments in the region keep growing
rapidly.
Still, the flurry of investments in Asian ports has raised concerns
about too much cargo capacity coming on line. Indeed, some
executives in the industry say shipping costs may fall this year as
supply outpaces demand. - Los Angeles Times 22/02/06