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China to Modernise Its Logistic Sector

China has released its first five-year plan for developing a modern logistics sector through 2025, emphasising the importance of promoting digital transformation, increasing business competitiveness and improving the quality and efficiency of logistics services.

According to the plan released by the General Office of the State Council, the country will prioritise cold chain logistics development, promote green packaging materials and further reduce energy use and emissions in the logistics sector. Other necessary measures include accelerating the digital and intelligent upgrading of the transportation, storage, delivery and packaging sectors and strengthening weak links in rural areas and cold chain logistics.

The country has the most prominent logistics sector in the world, outpacing all other countries in terms of cargo transport volume and shipments. According to the National Development and Reform Commission, the sector’s total revenue will reach 12 trillion yuan (US$1.74 trillion) in 2021.

The NDRC’s deputy head of trade, Zhang Jiangbo, explains that China’s logistics sector is facing challenges, including disparities in infrastructure and services offered between eastern and western regions and urban and rural areas, as well as a relatively small number of logistics businesses that compete globally.

The five-year plan includes a slew of measures designed to boost logistics service providers’ competitiveness, such as improving service quality and efficiency and refining the sector’s business environment. Another goal of the document is to reduce the overall cost of logistics services by implementing tax and fee cuts and resolving gridlocks in the industry.

The importance of the sector’s role in stabilising the national labour market is also emphasised in the plan, with over 50 million people now employed in logistics-related industries, according to Zhang. The government will strengthen its support for the growth of new business models in the sector and encourage job creation and more steps will be taken to protect workers’ legitimate interests.

The policy document also emphasised the importance of accelerating the development of international logistics networks, such as improving the organisation of China-Europe freight train services, moving forward with overseas warehousing development, and encouraging significant logistics providers to improve their global service networks. Furthermore, to improve international logistics services, China will work to achieve better alignment in standards for quarantine, inspection, certification, and customs clearance with other countries.

China’s major ports have increased throughput while making significant digital and intelligent construction progress supporting the logistics sector. According to the Ministry of Transport, the country now has the most automated terminals in the world, which has built or are still under construction. China has charted a course for development in which the construction of new harbours and traditional wharves coexist, with various technological paths pursued concurrently.

Traditional terminals, semi-automatic terminals, and fully automated terminals are available nowadays. As a result, a ship can be loaded and unloaded in three different types of terminals, maximising terminal resource integration.

Apart from that, China plans to upgrade high-tech industrial development zones across the country. The industrial zone modernisation is taking place in Ningxiang in Central China’s Hunan province, Lhasa in Southwest China’s Tibet autonomous region, Xuchang in Central China’s Henan province and Anqing in East China’s Anhui province.

All the improvements have been made to help China’s economic system modernise and real-economy upgrades. High-tech industrial zones must promote innovation and employ talent. High-tech companies, industries, science and technology, and small and medium-sized businesses must be developed in these areas (SMEs).

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