Nation playing significant role as transport gateway

Multinational corporations in the logistics and shipping sector believe China will remain a pivotal gateway to the broader Asia-Pacific region and generate lucrative business opportunities for global investors, as the country creates better conditions for foreign companies to play a bigger role in its market.

Foreign business executives say China's growth this year will outpace most major economies. They view investments in the country as strategic to harnessing an extensive network of supply chains and distribution channels.

Danish shipping and logistics services provider A.P. Moller-Maersk is building a green and smart logistics center in the Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone. The facility, with an investment of $174 million, will have a warehousing capacity of 150,000 square meters and is scheduled to be operational in the third quarter of 2024.

"If you look at the trade figures, a third of the world's exports come out of China, and a third of China's exports come out of the Yangtze River Delta region," said Jens Eskelund, North Asia chief representative of A.P. Moller-Maersk.

Highlighting that China and the European Union were each other's second-largest trading partners in 2022, Eskelund said trade between the two sides in 2023 would depend on whether Chinese consumers are back in force and on a rebound in consumption, as well as the trade balance between China and the EU.

"When we look at 2022, Chinese exports to Europe are three times larger in value terms than imports from Europe to China," Eskelund said. "I think most people that I have talked to have realized that decoupling is not a realistic aspiration because we are dependent on each other in Europe and in China."

China is one of the most important markets for DHL Express and the company will continue to invest in the country, said Wu Dongming, CEO of the China unit at the German courier services provider.

DHL Express inaugurated a new gateway in Wuxi, East China's Jiangsu province, earlier this year.

Along with its North Asia hub in Shanghai, these facilities will enhance network resilience and service capability to meet growing demand for international logistics in the Yangtze River Delta region, said Wu.

"Our gateway in Shenzhen, Guangdong province, is also under expansion to become a super gateway with significantly increased capacity and capability to serve the logistics demand in the Guangdong-Hong Kong-Macao Greater Bay Area," he said.

"We are confident in China's economy over the long run," Wu said, adding that the company's long-term commitment to the Chinese market remains unchanged.

China's huge market size, higher consumption potential and its complete industrial and supply chains are its unique competitive edges.

The State Council, China's Cabinet, issued a 24-point guideline in mid-August aimed at improving the environment for foreign investment and attracting more global capital.

The government's commitment to bettering the foreign investment climate includes six key areas, such as ensuring the effective utilization of foreign investment and guaranteeing equal treatment of foreign-invested companies and domestic firms.

US-based FedEx Express has been encouraged by the fresh guidelines, as they will help improve the level and quality of trade and investment cooperation, said its Senior Vice-President Eddy Chan.

"Looking ahead, we are confident in China and will continue to contribute to enhancing business and trade between the country and the world," Chan said.

Flexport Inc, another US multinational corporation that focuses on supply chain management and logistics, rolled out a new forwarding application internally this year, starting from China to the Asia-Pacific region and then rolling out globally.

The application enables partners to achieve technical consistency, leading to higher productivity through system integration and automation.

China has emerged as one of the largest cross-border e-commerce markets in the world.

As more Chinese businesses seek to venture further through cross-border e-commerce, global demand for such services will continue to rise, said Thomas Cassuto, vice-president and head of Asia at Flexport.

"Since the beginning of 2023, we have observed a positive response from the global market. There has been a significant rise in cross-border e-commerce shipments, which points to an upward trend in the global e-commerce market," Cassuto said.

With China entering a new era of green and innovation-led growth, the country saw the number of newly established foreign-invested enterprises reach 28,406 in the first seven months of this year, up 34 percent year-on-year, data from the Ministry of Commerce showed.

Investments by developed countries in China continued to grow.

Foreign direct investment from France, the United Kingdom, Canada and Switzerland in the January-July period jumped by 213.7 percent, 159.9 percent, 113.3 percent and 61.2 percent year-on-year, respectively.