All Roads Lead to West China

By+Hou+Beibei

Gansu， an inland province in northwest China， abounds with high-quality fruit， including apples， grapes and sweet pepinos. Located far from the nearest seaport， Gansu is faced with the problem of how to export fresh fruit in good time. “It takes 35 days to ship cargo from Shanghai to Rotterdam in the Netherlands. Air transportation is faster but the cost is higher. Now， the farm produce of Gansu and our neighboring regions can be exported from Wuwei Bonded Logistics Center，” said Fang Hongming， Chairman of Gansu Asia-Europe Continental Bridge International Logistics Ltd.， the operator of the center. “We have built a cold storage and the cold-chain transportation facilities and plan to open Sino-Europe Express freight trains in October. It will take only 11 days from Wuwei to Rotterdam.”

Wuwei， located in central Gansu， was once a key location lying along the ancient Silk Road. Today， as the junction of the Lianyungang-Horgos Expressway and the Lanzhou-Xinjiang Railway， it is still a transportation hub that connects China and Central Asia. On August 16， the first stage of construction of Wuwei Bonded Logistics Center， which is Gansus first area to be subject to special customs privileges was completed.

The bonded logistics center can take on the functions of seaports such as commodity inspection， customs clearance and tax refund. Once the exported goods arrive at the center， the enterprises can enjoy a one-stop customs clearance service and get the export tax return in the shortest possible time. Meanwhile， the enterprises can store import goods in the centers warehouses， paying custom duties until the goods are sent out of the center. According to Fang， many Taiwanese electronic enterprises， as well as local leading companies， have expressed a strong desire to set up factories or logistics bases in the center.

“The center will change the situation of Gansus relying on seaports to export and import and promote the economic development of the province and its neighboring areas. After the center starts operating， Wuwei will become an important international logistics hub linking Asia and Europe，”said Li Zhixun， Mayor of Wuwei.

Chinese President Xi Jinpings proposal of building the Silk Road Economic Belt in September 2013 offers unprecedented opportunities for western regions. Bonded areas have been established in Shaanxi and Gansu provinces， and Ningxia Hui and Xinjiang Uygur autonomous regions. When all of them are put into operation， the Silk Road Economic Belt will reemerge as a premium trade route from the East to the West.endprint

A logistics network

In order to improve the coordination between each other， the logistics park in Xian， capital of Shaanxi， has signed agreements related to in- spection， clearance and reloading of the goods with Xinjiangs Alataw Pass and Horgos， which are major ports on the border of China and Kazakhstan. According to the agreements， the exported goods on the cross-border freight train Changan， which was launched on November 28， 2013， only need to be checked up by the port customs after the consignors complete formalities at local customs.

Wuwei Bonded Logistics Center takes a similar approach to that of Xian. According to the strategic cooperation agreement signed between Wuwei and Horgos， goods being exported from the center can go through the port customs without inspection within four hours.

Since the Sino-Europe Express freight train will cross different countries in Asia and Europe， it is necessary for Wuweis bonded logistics center to cooperate with foreign railway companies. Fang said that the center is negotiating with railway companies in Kazakhstan and Russia. “From the center to the border port， we will build broad-gauge railways compatible with those in Central Asia and Europe， which will save the time and trouble of having to reload cargo owing to the use of different tracks. With convenient transportation， we can also help Central Asian countries to export their farm products through seaports in Lianyungang or Shanghai to Japan， South Korea and Southeast Asia，” he said.

On July 15， Lanzhou Comprehensive Bonded Zone， another bonded area in Gansu， gained approval from the State Council. It is a part of Lanzhou New Area， which incorporates Zhongchuan Airport and a number of railways and expressways. In the future， 19 railways crossing the zone will be constructed. It is expected to begin operating in June 2015.

Ningxia has established its first bonded area in its capital city Yinchuan in September 2013. Supporting exports and imports of halal food between China and Arabic countries constitutes the main focus of Yinchuan Comprehensive Bonded Zone. It is predicted the halal food industry output value will reach 20 billion yuan（$3.25 billion） by 2015.

Difficulties

There is no doubt that huge potential exists for a logistics industry along the Silk Road Economic Belt. Statistics released by the Horgos Customs showed that the cargo of exports and imports through the port hit a record high of 21 million tons in 2013， accounting for 42.2 percent of the total of freight passing through customs in Xinjiang. Despite cargo growth， the logistics industry in western regions still faces some difficulties to be overcome.endprint

Jiang Chaofeng， Vice President of the China Society of Logistics， pointed out that the international cross-border coordination of logistics between areas lying along the Silk Road Economic Belt is a complex process because of different laws and regulations in different countries. This represents a vital challenge for most domestic logistics companies， which need to develop in terms of management， marketing and qualifications if they are to operate internationally. The companies are in urgent need of talented people who are proficient in foreign languages， international trade， transportation and logistics and information management.

Another concern is out-of-date infrastructure and facilities. Take cold storage for example， which is essential to store fresh fruit. Gansu has the second largest apple planting area in China—4.35 million mu （290，000 hectares） and its yield of apples reached 2.7 million tons and the output value was 12 billion yuan （$1.95 billion） in 2013， according to Gansu Management Office of Agricultural Products Marketing. However， it still lacks an advanced cold-chain logistics system， a situation the new one built in the Wuwei bonded center hopes to remedy. In fact， most cold storages in western regions are small and cannot remain the required temperature of preservation. Furthermore， the number of the refrigerated trucks is far from sufficient.

The development of modern logistics in western regions is also restricted by a low level of digitalization. According to Gansus 12th Five-Year Plan （2011-15） of Logistics Industry Development， due to a lack of an integrated information network， many local logistics companies have limited means to obtain information， which has severely affected the efficiency of transportation. In consequence， an integrated logistics information service network urgently needs to be established.endprint