China issues plan to lower logistics costs

BEIJING - The central government asked for a concerted effort to lower logistical costs in an action plan issued by the State Council Monday.

China wants to reduce the ratio of logistics costs to sales revenue from 8.9 percent in 2014 to about 8.5 percent for manufacturers and from 7.7 percent to around 7.3 percent for wholesale and retail sellers by 2018.

The government will streamline reviews and approvals for logistics companies, cutting taxes and fees, according to the National Development and Reform Commission (NDRC) plan.

The document also called for a more efficient network, featuring better connected highways, railways, waterways and air routes.

Customs clearance will be sped up and delivery services will cover more rural areas, with financial support and adequate land supply guaranteed.

Eligible logistics businesses may issue corporate bonds and go public, or loan more from banks.

China's ratio of logistics costs to GDP was 14.6 percent in the first half of 2016, down from 16 percent in 2015, 16.6 percent in 2014 and 18 percent in 2013, said the China Federation of Logistics and Purchasing (CFLP).

By reducing the ratio by 1 percentage point, China can help industries save more than 900 billion yuan ($135 billion).

The dropping ratio has been attributed to improvements in transportation facilities and policies, said CFLP vice president He Dengcai.

Despite the consecutive declines, there is room for further decreases, the NDRC said last month, adding such ratio in China is about twice that of the United States and 1.3 times the level of India.