CHINA TRADE 2006 - Shanghai’s new “Brain” center

By: | at 08:00 PM | Channel(s): International Trade  Ports & Terminals  Logistics  

By Robert L. Wallack, AJOT (from Shanghai)Shanghai¹s North Bund area is deemed the “Brain” center of international shipping, with the highest concentration of government and commercial shipping factors in China.
Hundreds of Hong Kong-based service providers established offices in Shanghai ahead of China¹s World Trade Organization (WTO) commitments to open the shipping and logistics industry on December 11, 2005. The new office buildings are backed by the central and local government policies for developing Shanghai¹s Hongkou district to support the Waigaoqiao and Yangshan port areas.
“It is the central government¹s policy to develop Shanghai into four major areas:
international trade, finance, shipping (Hongkou) and commercial, for all of China,” said Ken Hui, Fans Trans International Ltd., in Shanghai. Eighty percent of Shanghai‘s shipping-related enterprises are headquartered in Hongkou district, such as freight forwarders, customs brokers and shipping companies (COSCO, Maersk, APL). There are many advantages to North Bund’s central location in the Hongkou district.
In the past, shippers and service providers had to go to different places in Shanghai for customs, inspections and other intermediary services. Now, the Shipping Service Mansion contains many government offices such as Customs, Inspections, Ports, Maritime Bureau and the Shanghai Shipping Exchange for “one stop” service. The North Bund area will create material flow, funds flow, information flow and talent flow. The entire area of the North Bund, the Bund and Liujiazui Financial Zone form the “Golden Triangle” for finance and trade industry resources so that commercial costs will be lower for shipping enterprises.
Fans Trans, a Hong Kong-based logistics service provider, was one of the first to receive the Hong Kong Service Supplier (HKSS) certificate under the Mainland-Hong Kong Closer Economic Partnership Arrangement (CEPA) in 2004. They partnered with Hongkou to assist other companies to become certified in Shanghai as wholly owned foreign enterprises. CEPA is a bilateral Free Trade Agreement between China and Hong Kong to reduce barriers to Hong Kong products and services to the Mainland market two years prior to China¹s commitments to foreign business under WTO.
Logistics, transport, and distribution are among the 26 service sectors China opened up to Hong Kong-registered companies. Hong Kong is still considered a foreign country in China and without CEPA, China only allowed representative offices without sales, or a joint venture with a local agent in China. “The Chinese government wants to support the Hong Kong government to help them improve their economy,” said Hui.
Sino Links International Ltd. is the Fans Trans entity appointed by Hongkou as the “window agent” to assist applications by Hong Kong shipping enterprises for CEPA or WTO arrangements in China. CEPA certified Hong Kong agents benefit from the booming Shanghai market, the world¹s third largest source of cargo, and the headquarters of various shipping lines.
“An agent in Shanghai with legal status can promote and branch into other cities without re-registering again,” said Hui.
CEPA has had further liberalization measures, which have had a great impact on China’s logistics industry. Last year and this year, CEPA II, III and IV were introduced. CEPA III and IV, “Trade in Services” is effective January 1, 2007 whereby the Mainland will further relax the market access conditions to promote cooperation in customs clearance facilitation, commodity inspection and quarantine, food safety, quality and standardization, as well as electronic commerce among other areas in trade and investment facilitation. These liberalization measures will prove useful in harmonizing Customs procedures and commodity inspections that differ from city to city and region to region on the Mainland.
CEPA IV will liberalize air and road transport to allow Hong Kong air transport sales agencies to set up wholly-owned foreign enterprises (WOFE) air transport sales

American Journal of Transportation