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MARKETS * China - The Continuing Challenge of Doing Business in China
Hong Kong,China -Outsourced Logistics/cincomblogs -18 July 2008: -- ... “China's economic growth has made a major impact on the global logistics and transportation industries,” Yansheng Zhang, director of the Chinese Mainland's Institute of International Economic Research, told a meeting of the Chartered Institute of Logistics and Transport (CILT). Of the top 30 ports in the world in 2007, 10 were on the Chinese Mainland, he added... The challenges of doing business in China are formidable, said Vincent Wong, former joint managing director with Kerry Logistics Network Limited (Hong Kong). Mainland firms prefer to keep their logistics operations in-house and regard logistics as a way of reducing direct costs rather than improving supply chain efficiencies, he pointed out. Competition is ferocious, with over one million registered logistics services providers in the People's Republic of China of which 90% are small- and medium-sized companies... There are 850,000 trucking companies on the Mainland with an average of 1.4 vehicles per company, continued Wong. The international express deliveries sector is dominated by a few providers: DHL and Sinotrans (38% of the market), EMS (30%), FedEx and Datian (16%) and TNT-Marchplus (6%)... “The market remains extremely fragmented with no real pan-China player yet,” said Wong. Firms are still competing on price rather than quality of service... Road transport accounts for 76% of total transport and since 75% of all main highways in China are toll roads, tolls account for 30% to 40% of costs. In addition, 70% of all accidents and 50% of all road injuries and deaths are related to overloaded trucks... (Picture: Hong Kong Bay view)
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