Haves vs have-nots in Yangtze River
debate By Michael Mackey
SHANGHAI - One of the great waterways of the
world and the longest in Asia, the Yangtze River for
thousands of years has been a source of great bounty, as
well as great suffering when it floods. Now it's being
harnessed in China's frantic modernization drive, and
the competition is on between the "blues", or the haves
of the rich coastal region, and the muddy "browns", the
have-nots of the hinterlands.
The idea is to
connect better the ports along the 5,500 kilometers of
the Yangtze, which originates in the Tibetan highlands
and flows into the East China Sea near Shanghai, China's
financial center and major east-coast port. The river,
which divides China between north and south, carries
three-quarters of the country's river traffic, but the
inland ports in several provinces all are far less
developed than Shanghai. The issue is how to develop the
fertile region and upgrade the ports and the
infrastructure transporting goods to the ports and then
on down the river. How to share the wealth and allocate
resources to improve the infrastructure is the issue.
Much of the resources must go to the underdeveloped
inland ports, but Shanghai and influential industrial
and political figures in the region are not happy to see
the money flow upriver, instead of downstream.
At a recent conference on logistics and
infrastructure here, participants focused on how to
develop the waterway rationally, without leaving inland
ports behind in the modernization. Industry analysts
have urged further reform of the logistics industry to
develop the Yangtze River Delta (YRD), although few
specific initiatives were presented.
Headed by
the boom city of Shanghai, the YRD is one of the world's
economic hotspots, but development of the upstream ports
is emerging as an issue within the logistics industry,
for which the river is already important. Official
statistics show that it handled 320 million tons of
freight last year. With the road and rail infrastructure
lagging, the already flowing Yangtze offers a resource
and a waterway to reach into the interior quickly, and
to get goods to the coast quickly.
The problem
is not logistics alone. A major problem is the very
uneven economic development of the region, from the
developed coast to the poorly developed interior. What
the Yangtze River region needs is rational and coherent
development throughout. Nationwide, China's coastal
provinces and cities get rich and the interior limps
along in their wake. The development of the Yangtze
region is a way to spread China's wealth inward, rather
than just letting it build on the coast.
Like
many things in China, Yangtze River development contains
an important if unspoken political dimension. Many
supporters of former president Jiang Zemin, the
so-called Shanghai Clique, congregate in Shanghai and
its coastal region. They are reluctant to see the
benefits of the rich "Gold Coast" diluted and shared
with poor inland provinces. Here Chinese politics can
sometimes be seen as a struggle between the better-off
blues of the coastal provinces, with more cosmopolitan
and overseas outlooks, and the river browns, who are
more homebound in the muddy backwaters in the
hinterlands of the Yangtze. The debate is gaining
prominence and it centers on whose visions should
prevail and who should benefit from additional economic
development.
Foreign investors, experts asked
to help A debate is under way about how best to
achieve the economic integration of the region, and
foreign companies have been asked to participate. "We
welcome your ideas on the Yangtze River Plan. Please
feel free to contact and communicate with us," Lu Haihi,
chairman of the board of the Shanghai International Port
(Group) Co (SIPG) Ltd, told a recent conference on
developing the region and improving its logistics and
infrastructure.
"SIPG, with its strategic focus
on the Yangtze River Delta and the Yangtze River
economic zone, is now devoting itself to formulating,
perfecting and implementing its Yangtze River Plan. The
plan aims at breaking down the bounds of administrative
divisions and opening transregional logistics, such as
container terminal and container transfer business, by
establishing joint ventures," he said. This could merely
be a prelude to asking foreigners to invest, or it might
just be reassuring words that they will be involved and
rewarded economically in the end. But asking foreigners
for ideas suggests that somewhere in China's bureaucracy
something is stirring.
One aspect of the
development problem is the overpowering role of Shanghai
in effectively drawing the business and blocking other
ports on the river. Not that many want to talk about it,
but that's business and politics.
One industry
source, Huang You-fang, vice president of Shanghai
Maritime University, argued that logistics on the river
should become the, not a, new focus for China's economic
and social progress. "In a word, developing the
logistics on the Yangtze River is scientific and
reasonable, thus it should become the new focus for
China's economic and social development," he told the
Shanghai conference.
This, however, involves the
huge challenge of ending, or certainly diluting,
Shanghai's hegemony, something the cosmopolitan city and
economic and financial center will resist. There are two
ironies here: Ningbo, a fast-growing port south of
Shanghai, is considered China's best natural deepwater
port, with depths of 17-20 meters, making further
dredging unnecessary.
Shanghai, it would appear,
despite its limitations of relatively shallow waters,
wins and remains ahead by political default.
Diluting Shanghai's hegemony over river
traffic Even if all this were to change and
Shanghai's hegemony over river business were broken, it
would then have to be followed up by improving
land-based infrastructures upriver, not just building
new roads and railways but linking them to the inland
ports. It would mean as well a high-quality feeder
network on the upper reaches of the river, the kind
found on the coastal parts of the YRD.
Parallel
to this task is another just as complex and just as
politically fraught; upgrading information technology
(IT) is also critical. "Facilities in ports must be
upgraded to provide more efficient handling and wider
service such as through bills of lading," said Bo Frank
Nielsen, director of China Strategic Development of
Modern Terminals, told the conference. Further, there's
the security issue. Nielsen said new security standards
pose a great challenge to the inland ports and hence to
the goal of development of the Yangtze as an integrated
whole.
Huang, of Shanghai Maritime University,
said hardware development should be done as soon as
possible but admitted it would require a refocusing of
policy. He gave a general, basic example: the ports
themselves are antiquated and need modernization after
several decades of steady, and recently accelerated,
use. "More attention has been paid to the coastal ports
but more attention should be paid to inland ports," he
said.
Zhang Ye, president of the Shanghai
Shipping Exchange, went so far as to advocate that
funding for port operations and for their renovation
become "market-based", like much of the Chinese economy.
Port authorities, he said, apply to the central
government for funds without a sound business and
physical plan for expansion and regional development. He
said the government should stop funding ports, which
should assess the market and its possibilities and then
attract investors so that they can stand alone, without
the government as a crutch.
Zhang also cited
another problem in developing the Yangtze River region -
water management. China is plagued by power cuts because
of an energy shortage, and further water shortages from
the Yangtze, since the major river needs careful
stewardship. Speaking of port development as part of the
transport infrastructure, he said, "It must be
coordinated with water-resource utilization. Port
development and planning shall conform to the principle
of sustainability."
Huang urged reform of the
backup to these ports and the need to build alliances
between coastal ports and those on the river - both
endorsed by industry players. "The software must be
improved," said Nielsen.
Huang also identified
two more problems and issues - the phased development of
the freight trade and its related services.
"Developments are not as harmonious as they should be,"
he said, referring to a complex web of problems in the
finance, education and patent fields, which he said hold
back the industry. The second is the need to extend
strategic alliances, and here there were differences of
opinion. While Huang spoke of this as a balancing act
between enterprises in the Yangtze River Delta and the
coastal ports, the industry view, as Nielsen put it, is
that cooperation is a must and should involve
cooperation across the supply chain to facilitate the
envisaged feeder network for ports all along the river.
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