Transports and Logistics in China

Logistics are essential for one of China’s principle objectives: facilitating the movement of both people and goods.  The topic automatically entered discussions during the third plenum when the PCC had to face the prospect of reforming its hukou system (which registers and controls the population within its territory) and the goal of combining markets with public administration.  These possible reforms hinge on transport and mobility.  Waiting for exquisitely political decisions, the government intends to continue expansion politics witnessed over the past decade.  Exercising characteristic pragmatism, China has favored results until now, using the logic of learning by doing.   In this way, China arranged the transfer of approximately 200 million people from the countryside to cities, imagining that it would then dismantle the imperial household registration system once the task was completed.  Factories and shipyards along the coast were inundated with migrant workers, and the goods produced there invaded the world.  Both labor and products had to be transported, and the administration didn’t waste any effort.  The government was aware that without infrastructures, offering low-cost labor to investors was insufficient; without ports, goods would remain in warehouses.  The results achieved have reinforced this conviction even more: the country was underdeveloped for too long to allow the construction of an efficient transport network to stagnate.  An immense territory, pervaded by agricultural and stationary mindsets, China has undergone an historic period of change, but it sill hasn’t reached a conclusion.  An excellent study by Li&Fung in Hong Kong reveals that government investments in the four transport modalities—rubber, iron, water and air—are continually increasing.  The growth concerns both passengers and goods, as if a new and stronger concept of mobility is at this point indisputable.  Not by chance, the most important improvements took place in western regions of the country, representing a “new frontier” similar to the historical American West.  Neglected for years in favor of the rich coastal regions, new industries are registering offices in central China, motivated by the availability of convenient production factors, enhanced, in fact, by an infrastructure network.  China’s Ministry of Railways was dismantled to rationalize businesses and silence the voice of corruption and inefficiency that accompanied its records.  Now, China boasts the most extensive high-speed railway network.  Furthermore, in 2012, Shanghai’s port moved the most containers in the world (32.6 million TEU per year).  Only 3 of the world’s top 10 ports in this classification are not Chinese.  At the same time, Beijing’s Capital Airport has become the second busiest airport in the world and threatens Atlanta’s traditional supremacy.  Finally, Shanghai Pudong has eared third place in international rankings.  The numbers are impressive, but they are still insufficient for governmental action.  New funds will bring order to railway hubs in second- and third-tier cities; the most distant regions will be connected via public airports and highways, improving safety, income and environmental protections.  It will be a matter of managing a complex and perhaps more insidious situation: dedicating funds without allowing money to get lost in dark corners, but funneling it effectively toward modernizations that the country still needs.

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