Logistics and the Chinese economy
<\/strong>China is the third-largest country in terms of area after Russia and Canada and has the largest population (1.3 billion). China’s economic growth in 2007 reached 11.4%, which was 0.3% higher than in 2006, and the gross domestic product (GDP) amounted to 24.66 trillion yuan (approximately 3.37 trillion USD). The largest share of GDP came from industrial production and construction (49.2%), services (39.1%), and agriculture and the mining industry (11.7%). The value of international trade at the end of 2007 amounted to 2.17 trillion USD, including 1.21 trillion USD in exports and 0.96 trillion USD in imports. The growth rate of exports was higher (25.7%) than the growth rate of imports (20.8%). The trade surplus at the end of 2007 amounted to 262.2 billion USD. The main trading partner of China is the European Union, and among the EU member states: Germany, the United Kingdom, the Netherlands, France, and Italy. The second most important economic partner of China is the United States (the value of trade turnover in 2007 amounted to 302 billion USD), followed by Japan (235.9 billion USD). Trade with Poland in 2007 amounted to 9,237.3 million euros, including exports to China of 721.5 million euros and imports of 8,515.8 million euros.<\/p>
In Polish exports, the largest share is held by metallurgical products as well as products of the electrical machinery and chemical industries (90% of exports). On the list of the most important goods in our exports to China, copper takes first place. Chemical compounds and specialized machinery also occupy an important place. The relatively high position of animal intestines is also noteworthy. This indicates a low diversification of our exports and its concentration on goods with a low degree of processing. Regarding imports to Poland, almost half consist of electrical machinery industry products. Important commodity categories are also light industry products, although their share is lower than commonly believed, as well as metallurgical products, electronic industry products, and telecommunications equipment.
The value of realized foreign direct investment in 2007 amounted to 74.8 billion USD, which is an increase of 13.59% compared to 2006. At the same time, in the same year, Chinese companies invested 18.7 billion USD in the form of direct investment abroad, which is an increase of 6.2% (excluding the financial sector). Due to rapidly rising food prices, inflation is currently becoming a serious problem. In February 2008, the average consumer price index (CPI) was 8.7% (year-on-year).<\/p>
The priorities of current economic policy include:
1) ensuring stable socio-economic development;
2) meeting human needs;
3) continuing reforms and the policy of opening up to the world;
4) environmental protection;
5) increasing the efficiency of natural resource utilization.<\/p>
The information presented above shows that the Chinese economy is developing dynamically, and its growth is driven by the development of infrastructure investments, especially in the steel industry (nickel imports doubled, iron ore – 50% increase, steel consumption increased by 25%). In the last five years, China has rapidly climbed the classification of countries by GDP size. Since 1998, it has already overtaken Canada, Italy, and France. In 2003, the Chinese economy ranked third, alongside the USA and Japan, in terms of investment volume. Today, China is the fourth country in the world in this classification, behind the USA, Japan, and Germany. Furthermore, the economy is developing thanks to an increase in consumption (9% growth in retail trade), the development of the real estate market, an increase in direct investment, opening up to foreign markets, and ongoing liberalization processes (in 2001, China was admitted to the WTO).
The Chinese market has changed from a producer’s market to a consumer’s market, which has caused a rapid increase in requirements for improving the methods of supplying material goods and services. There was a need to adapt the logistics industry to the changing environmental conditions and to meet the basic requirements of logistics in terms of shortening and accelerating all processes at every stage of the cargo distribution system.
The development of the logistics industry was also caused by the growth of international trade (exports and imports) in China. Many warehouses and logistics centers have been built with the participation of the state, but also foreign investors. Many foreign organizations operate on the Chinese market, building large-area facilities to support the domestic market or exports to other countries. Storage is one of the key problems of Chinese logistics. There are only a few modern warehouses or distribution centers in China. Most warehouses are primitive facilities with an area of 500 – 3,000 sq m, unsuitable for storing goods. Interest in the Chinese market entails investments in this area, and currently, large-area warehouses (among others by APL Logistics) or full-fledged distribution centers are being built.<\/p>
There are about 800,000 logistics enterprises on the Chinese market that own only 2-3 trucks, however, the most important domestic logistics service providers are:
1) China Ocean Shipping Group Corp (CO-SCO);
2) China National Foreign Trade Transportation Corp (Sinotrans);
3) China Material Storage & Transportation Corp (CMST);
4) China Railway Express Corp (CRE);
5) China Post.<\/p>
In 2006, the total revenue of the 50 largest domestic logistics enterprises amounted to 309.9 billion yen. Although these enterprises are small, and few of them are registered as integrated logistics enterprises. Most of them conduct a limited range of services, i.e., transport or storage services. The main domestic logistics enterprises are located near the most important seaports, airports, or major cities.<\/p>
The article comes from the magazine “Logistyka” 6/2009.<\/p>
Logistyka2009-6s21.pdf<\/a>