PROSPECTS FOR PORTS IN SOUTHEASTASIA:
RISING TO THE CHALLENGES OF CHINA'S EMERGENCE ASAN ECONOMIC
SUPERPOWE,R
I'lnzertl Klnlid A r n t i S u z n n n Z n m i l
ABSTRACT
T h e e m e r g e n c e o f C h i n a a s a n e c o n o r n i c s L l p e r p o w e r h a s b o o s t e d g l o b a l t r a d e tremendor-rsly. Southeast Asia, a ma,iur trading partner of China, stands to benefit frclm the latter's huge demand for commodities and merchandized goods. This paper t r a c e s t h e i m p a c t s t h a t C h i n a ' s r i s e h a s h a d o n t h e d e v e l o p m e n t o f p o r t s i n t h e region and e'valuates tire imperrcling charllenges that these sectors will f;rce in the face of increasing trade ftrelled bv the thrust of China's economic progress. It argues t h t r t t o t a p i n t o C h i n a ' s b o o m i n g t r a d e , p o r t s i n t h e r e g i o n r r e e d t o i n c r e a s e t h e i r l e v e l o f c o m p e t i t i v e n e s s a n d t h e s h i p p i n g s e c t o r n e e d s t o e x p a n d i r r t a n d e m t o facilitate greater containerized transportation going into and coming out of China.
This paper aims to provide an olrtlook on the challenges and prospects for ports in Southeast Asia (SEA) in relation to China's continued economic growth to iacilitate greater trade between the region and the rvorld's newest emerging slrperpower.
"l hntta uittrcssad tlrc trantartdous anarcy of tlrc mnssas.
Otr tltis fortndntiotr, it is ptossibla to nccorttplislt nny tnsk ulntsoeuer"
(Mno Zt'dortg)
T H E R I S E O F T H E D R A G O N : C H I N A , S A S C E N S I O N A S A SUPERPOWER
Wlren Mao Zedong penned down these thoughts in his Little Red Book, little would he have thor-rght that those words will reverberate into the 21't centttry, aptly describing China's rise as the world's newest powerbroker.
The emergence of China as a suLrerpower-in-waiting, on the same for-rndation
lnti, tsilnrtgntt 70, Disartrbar 2005
Since the Chinese leadership shifted the world's most populous nation's e c o n o m i c p o l i c y f r o m a c e n t r a l l y planned to a market-oriented one, China h a s s e e n t h e k i n d o f e c o n o m i c boom that has almost defied economic theories.
C r o w t h h a s b e e n r e l e n t l e s s , p o \ , v e r e d b y t r e m e n d o u s a g r i c u l t u r a l a n d industrial outputs and huge foreign investments. In cozrstal areas especially, growths have averaged about 10% annually for many consectrtive years.
C h i n a ' s C D P r e a c h e d 9 . 5 ' / . v a l u e d a t USD1.65 trillion in 2004, fr-rellec b y ' s t r o n g c l o m e s t i c d e m a n d a n d f o r e i g n investment, ernd high levels of e x p o r t s . t I n t h e s a m e y e a r , i t s e x p o r t v a l u e s grew 33"/o vvhile its imports grew 26"/".'? China's booming trade ftrelled the grorvth of lvorld merchandise e x p o r t t o 1 3 u 1 , i n 2 0 0 4 , c o m p a r e d t o 6o/n i n 2 0 0 3 . 3
A m i d s t t h e s e r e m a r k a b l e statistics, analysts harre issued warnings of e c o n o m i c o v e r h e a t i n g a n d h a r d l a n d i n g o f C h i n a ' s s t u n n i n g g r o w t h . Nevertheless, the Chinese economy has shown no sign of slowing down. To the credit of the Chinese goverrunent, it has initiated variolls measlrres to cushion t h e e c o n o m i c a n d s o c i a l im p a c t o f t h e economy's breakneck growth. Towards this end, it has ttnclert.rkerr various mee-lsrlres to improving ancl strengthening m a c r o - e c o n o m i c r e g t r l a t i o n s a n c l r e f o r m i n g businesses, along with social d e v e l o p m e n t p r o g r a m s , t o c r e a t e a h a r m o n i o u s society amidst the new riches.
N o d o u b t t h e r e h a v e b e e n p r o b l e m s a r i s i n g f r o m m a n a g i n g t h e t r a n s i t i o n a n d e x p l o s i v e g r o w t h i n w h a t i s popularly termed as "socialist m a r k e t e c o n o m y " , b L r t China seems poised to experience continuecl rapid economic growth in the years ahead, albeit perl-raps at a less dramatic rate.
C h i n a ' s l e a d e r s h i p h a s t a k e n n o t e o f t h e n e e d t o m a i n t a i n t h e m o m e n t u m of r a p i c l g r o w t h i n a s t a b l e m a n n e r , w h i c h shor-rld prut it on a solid track to strstain the rapicl economic growth for many years to come.
C H I N A ' S R I S I N G T R A D E W I T H S O U T H E A S T A S I A
China's increasingly huge demand for international trade is one of the major factors fueiling growth in the global economy. Its growing economic stature, combined with the sweeping forces of liberalization and globalization, have significantly facilitated greater global trade, opened np economies and fueled consumer demands in an unprecedented scale. The combination of these forces h a s s p u r r e d i n t e r n a t i o n a l t r a d e d r a m a t i c a l l y over the last few years.
B a r r i n g s h a r p e c o n o m i c t u r n a r o t r n d s a n d political turmoil, China is e x p e c t e d t o c o n t i n u e t o p o w e r t h e e n g i r r e o f i n t e r n a t i o n a l t r a d e i n t h e y e a l ' s a h e a d . T h i s p r a g r n a t i c p r o g n o s i s p r e s e n t s a h e a l t l - r y o u t l o o k f o r t h e S o t r t h e a s t A s i a n r e g i o n . C l - r i n a ' s b u r g e o n i n g i n t e r n a t i o n a l t r a d e w i t h t h e r e g i o n , i t s f i f t h largest trading ptrrtner, has had arn indelible impact on the region's economies.
I2B
l',lnzcru, Anni Suznrrn - Prospacts for Ports itt Soutlrcost Asin Statistics from the Association of Southeast Asian Nations (ASEAN) Secretariat shows that China-ASEAN trade volume has been on an up-trend over the p a s t c l e c a d e ( s e e T a b l e I ) . I n 2 0 A 4 , t h e t r a d e v o l u m e b e t r , v e e n th e t w o sllrpassed USD100 billion for the first time.
Table I: China's trade with ASEAN, 7993-2003 (USD million)
Year Export Import
T o t a l7993 1,528.69 4,336.36 8 , 8 6 5 . 0 5 r994 5 , 3 0 3 . 8 2
v l ' v v ' / t 7 6 R q q'1 7 , 0 6 2 . 8 7
1995 6,200.89 7,729.72 1 3 , 3 3 0 . 6 1
r996 7 , 4 7 4 . 7 3 9 , 2 7 7 . 6 2 76,691.75 1997 9 , 7 6 7 . 8 9 1 3 , 4 8 2 . 8 8 22,650.77 1998 9 , 2 0 2 . 5 9 11,277.54 2 0 , 4 I 4 . 7 3 7999 26,472.38 1 9 , 4 0 8 . 0 0 45,880.38
2000 35,034.66 26,490.97 61,575.57
2001 31,,552.09 23,833.07 5 5 , 3 8 5 . 1 6
2002 19,517 .55 23,272.23 42,759.78
2003 27,044.23 28,272.24 55,316,47
2001
42,1)00.006 3 , 0 0 . 0 0 1 0 5 , 9 0 0 . 0 0
Source: SOUTHEAST ASIAN Secretariat, Xinhtra Ner.t's Agcncy
China-ASEAN trade relations are set to enjov brighter prospect with the China-ASEAN Free Trade Agreement which is expected to be implemented in 2010.+ The initiative, which will lead to the creation of the world's largest free trade zone, is prrojected to c'lor-rble trade volurne betrn,een the two.s This historic pan-Asian trade pact is poised to rival the US and Etrropean Union as a trade bioc of significant clotrt and size.t'
THE BOOM OF PORT DEVELOPMENT IN CHINA
No disctrssion of China'stortr daforce economic performance would be complete without taking a look at its maritime strengths and port development as a majority of its international trade is transported by sea.
China has been ranked as the fourth most important maritime nation by way of number of merchant fleet (2,612 vessels) ancl its 6.777. contribution to t h e r v o r l d ' s t o t a l t o n n a g e , a s o f l Janllar)/ 2005.'1 A t t h e e n d o f 2 0 0 4 , i t c o m m a n d e d 6 . 2 " / r , s h a r e o f w o r l d t r a d e g e n e r a t e c l i n t e r m s o f v a l u e . s I n a
lnf i, Iltltrrqntt 10, Drsutrl,cr 2005
The grorn'th irr its intern?-ltional trade has hacl a tremendous impact on t h e g r o w t h o f i t s p r o r t s e c t o r a n d h a s g o t t h e n a t i o n ' s p i a n n e r s i n a h u r r y t o c o n t i n u e e x p a n d i n g i t s p o r t c a p a c i t y t o s u p p o r t t r a d e a n d c o n t a i n e r t r a f f i c g r o w t h . T h i s h a s b e c o m e a m a t t e r o f n a t i o n a l i n t e r e s t a s t h e c o m i n g vears p r o m i s e t o s e e C h i n a s u s t a i n i n g s t r o r r g t r a d e p e r f o r m a n c e . T h i s i s e x p e c t e d to boost its cargo base, especiallv from the manufacturing sector, and clemand r n o r e o f i t s p o r t a n c l s h i p p i n g s e r v i c e s .
T h e C h i n e s e g o v e r n m e n t i s g i v i n g t o p prioritv to develop its ports n n c - l e r i t s 1 1 t r ' f i v e - y e a r d e r . e l o p m e n t p l a n t o s u p p o r t t h e c o u n t r y ' s b r e a k n e c k economic gror.t'th. The plan lays dor,t,n a systematic straitegy to develop its p o r t s a r r d h u g e a m o u r l t o f f u n d s h a v e b e e n a l l o c a t e d f o r t h i s p t r r p o s e . l 0 P l a n s a r e a f c l o t t o p i t C h i n e s e p o r t s t o c o r n p e t e d i r e c t l v r , t ' i t h o t h e r S o t r t h e a s t A s i a r - r re g i o n a l p o r t s s u c h a s P o r t o f S i n g a p o r e f o r A s i a n r e g i o n a l transshipment cargos. For example, Shanghai Port has been earmarked as a potential transshipment port to tap into its populor-rs hinterland and hrige d o m e s t i c m a r k e t . i r T h e c o n s t m c t i o n o f n e w p o r t s a r e a l s o i n t h e p i p e l i n e , s u c h ; r s t h e 3 - m i l l i o n T E U c ; r p a c i t v d e e p w a t e r p o r t i r r Y a n g s h a n a i m e d a t p r o v i c l i n g s l r a r e c a p a c i t v f o r t h e p r e d i c t e c l g r o w t h i n t h e Y a n g t z e R i v e r D e l t a , a m a j o r t r a d i n g a r t c . r v ir r C h i n a . P r o j e c t e d t o c o s t U S D 1 6 b i l l i o n , Y a n g s h a n i s e x p e c t e d t o b e t h e l r , o r l d ' s l a r g e s t c o n t a i n e r p o r t u p o n i t s c o m p - r l e t i o n i n 2020.1?
T o c l a y , a s a r e s t r l t o f t h e e c o n o m i c b o o m a c r c s s A s i a , n o d o t r b t g a l " ' a n i z e c - l b y e s c a l a t i n s t r a d e w i t h C h i n a , 1 4 o f t h e w o r l d ' s t o p 2 0 c o n t a i n e r t e r m i n a l s a r e A s i a r r - b a s e d ( s e e T a b l e I I ) . ' 3 h n p r e s s i v e l y , f i v e o f t h e s e te r m i n a l s a r e l o c a t e d o n m a i n l a n d C h i n a , t r n c l e r l i n i r r g t h e r a p i d g r o w t h o f i t s t r a d e and economy and its growing clout as a maritime power. la
The inclusion of Chirrese ports in the list underscores the rapid growth of the r-Lation's port throtrgl-rprut and maritime trade, clisplacing the position o f K o b e . a n d Y o k o h a m z r . T h e i r g r o l r ' t h r a t e s h a v e a l s o f a r o u t s t r i p p e c l o t h e r l n o r e e s t a b l i s h e r - 1 A s i a n p o r t s , t r n c l e r l i n i n g t h e t r a d e a n i l e c o n o m i c c l e v e l o l r m e n t o f t h e n a t i o n . E v e n H o n g K o n p ; ' u t ' h i c h h a s m a i n t a i n e d i t s p o s i t i o n a s t h e w o r l c l ' s b u s i e s t p o r t s i n c e 1 9 9 2 h 4 s b e e n g r o w i r - r g a t a l o w e r rate compared to Shanghai and Shenzhen ports which experienced increased tlrroughput by more than threefold from 7999 to 2004.
L e a d i n g t h e e x p l o s i o n o f g r o w t h o f C h i n e s e p o r t s w a s N i n g b o P o r t n,hich notcired the highest percentage gain in 2004. The port has been growing at an astounding avcrage growtl-r in TEU traffic rate of 44"/o for the last six v e a r s . 1 5 S h a n g h a i p o r t i s p r o j e c t e d t o b e t h e b i g g e s t h u b p o r t i n E a s t A s i a a n d t o s e r v e a s C h i n a ' s d i s t r i b t r t i o n a n d l o g i s t i c s s e r v i c e s b a s e f o r g l o b a l t r a d e . T h e c o n c e n t r a t i o n o f c a r g o b a s e a n d i n c r e a s i n g f o r e i g n d i r e c t investment (FDI) has made Shanghai otrtpace other areas of growth in the cotrntry. It is expectecl to handle a capacity of 25 million TEUs by 2070, double the volume handled in 2004.
13t)
R a n k
Port 2002 2003 2004
I
I H o n s K o n s ( C h i n a )
19.r4 20.82 27.93
2
S i n s a D o r e16.94 1 8 . . + 1 2 0 . 6 0
a
J Shanshai
8 . 8 1 r1.37 74.57
4
Shenzen7 . 6 7 r0.70 1 3 . 6 5
5
B u s a n9 . 4 5 10.37 1L43
o Kaoshiturg
8 . 4 9 8 . 8 1 9 . 7 1
7 Rotterdam 6 . 5 2
/ . r l )8 . 3 0
B Los Anseles 6 . 1 7 6 . 6 1 7.32
q Hambtrrg
5 . 3 7 6 . r 4 7.03
1 0 Dr-rbai 1 . 7 9 5 . 1 5 6 . 4 3
11
A n t w e r p4 . 7 8 5 . 4 4 6 . 0 6
1 3
L o n g B e a c h4 . 5 2 1 . 6 6 5 . 7 8
12
P o r t K l a n g4 . 5 0 4 . 8 0 5 . 2 4
T4
Q t r i n g d a o3 . 4 1
'+ . .:-'-tt ' ' t A5 . 1 4
1 5 Nert, York 3 . 7 5 4 . 0 4 4 . 4 0
T6
Tanjtrng Pelepas2 . 6 7 3 . 5 0 4 . 0 2
7 7 Ninsbo 0 . 0 0 2 . 7 7 ,1.00
1 8 Tianiin 0 . 0 0 3 . 0 1 3 . 8 1
1 9
L a e m C h a b a n s2 . 6 6 3 . 1 8 3 . 6 2
20 T o k v o 2 . 7 7 3 . 2 8 3 . 5 8
NiZCt"rl, Anni Sttztun - ProsTtccts.for Ports irt Soutlrcnst Asin
Table II: Top 20 container terminals and their throughput,2002-2004 [in million TEUs(twcnty equivalerrt unit)]
Sortrcc: UNCTAD, Revier,t, of Maritime Transport 2005
B e s i d e s c o n t a i n e r p o r t , o t h e r t y p e s o f t e r m i n a l a r e a l s o b e i n g c o m m i s s i o n e d t o f a c i l i t a t e C h i n a ' s e m e r g i n g e n e r g y n e e d s a n d g r o w i n g demands for bulk commodities like iron ore and grains. The largest Chinese f a c i l i t v - t o u n i o a d V e r y L a r g e C r u d e C a r r i e r . ( V L C C ) v e s s e l s i s b e i n g constrncted in Dalian, ecluippecl to serve six refineries with a total capacitv o f 4 6 m i l l i o n t o n s . 1 6
C h i n e s e p o r t s h a v e a l s o e n g a g e d i n s t r a t e g i c a l l i a n c e s r t ' i t h f o r e i g n p r o r t m a n a g e m e n t c o m p a n i e s . T h e p o r t o f D a l i a n h a s e n t e r e c l in t o a s t r a t e g i c partnership with APM Terminals, Cosco Pacific and Port of Singapore Authoritv t o d e v e l o p t h e p o r t t o s e r v e t h e n o r t h e r n r e g i o n o f C h i n a . r T X i e ' r m e n P o r t A r - r t h o r i t y h a s a l s o s i g n e d a n a g r e e m e n t w i t h A P M T e r m i n a l s t o f i n a n c e t h e d e v e l o p m e n t o f a n e w t h r e e - b e r t h t e r m i n a l e s t i m a t e d t o c o s t U S D 3 5 0 million. ls These engagements underline the ambitions of Chinese ports to grow, in line with the explosive trade growth in the cottntrv.
P a r a l l e l i n g t h e i r t r e r n e n d o u s g r o w t h , m a n y C h i n e s e p o r t s r e p o r t e d record traffic increases in 2004, resr-rlting in congestions in several ports. In
lnti, Bilnrttntr 70, Disarrtltcr 2005
p e r f o r m a n c e s f o r d i s c h a r g i n e C a p r e - s i z e v e s s e l s a t a r a t e o f 6 , 0 0 0 t o n s p e r h o u r .
T h e f o r m a t i o n o f e c o n o m i c cltrsters of resions has also contribtrted to c l e v e l o p m e n t o f C h i n e s e p o r t s . T h e e c o n o r n i c r e g i o n s i n c l u d e Y a n s t z e R i r . e r D e l t a , P e a r l I l i v e r D e l t a , B e i f i n g - T i a n j i n - H e b e i c i r c l e , t h e w e s t r e e i o n , central C h i n a r e g i o r r a n d n o r t h e a s t i n d u s t r i a l r e g i o n . 2 "
As more manufacturing base move from the south to the eastern and n o r t h e r n r e g i o n o f C h i n a , i n f r a s t r u c t u r e d e v e l o p m e n t i n t h i s r e g i o n has i n t e n s i f i e d . W i t h t h e c o n c e n t r a t i o n o f r n a n u f a c t u r i n g a c t i v i t i e s i n t h e Y a n g t z e Ilir,'er corridor, the need for China to improve the connectirrity between central C h i n a a n d i t s c o a s t a l p o r t s b e c o m e s n l o r e c r i t i c a l . W i t h t h e o p e n i n g o f T h r e e C o r g e s D a m , c o n t a i n e r m o v e m e n t i s e x p e c t e d t o i n t e n s i f y i n t h e a r e a . R i v e r t r a n s p o r t a t i o n a n d r i v e r p o r t s t r r e z r l s o g i v e n p r i o r i t v i n i n f r a s t r u c t u r e d e v e l o p m e n t t c l m e . e t C h i n a ' s g r o w i n g t r a d e .
C H I N A ' S E C O N O M I C A N D T R A D E G R O W T H A N D I T S INFLUENCE ON SOUTHEAST ASIAN PORTS
T h e t r e m e n c l o t r s g r o n ' t h o f w , o r l d m a r i t i m e t r a d e a n d t r a r r s p o r f a t i o r r i s currently be.ing fuclecl Lrv get"re.al global economic growth and China's fast rnultiplying for international trade volume. Such huge clemand is showing no sign of abating. Worlcl seaborne tracle €fre\v significantlv in 2004, reaching 6 . 7 6 b i l l i o n t o r r s o f l o a c l e c l g o o d s . 2 r C l a r k s o n R e s e a r c h S t u d i e s p r o j e c t e d i n i t s S p r i n g 2 0 0 5 r e p o r t t h a t t h e ' u v o r l c l c o r r t a i n e r t r a d e i s s e t t o g r o w b y 1 0 . 0 ? i , irr 2005 andc).7"/,, in 2006.r2
Simulated by China's economv, the rvorld container trade is expected to grow larger. Mr-rch of this tracle will trickle to the Sotrtheast Asian region whicl"L i s i t s m a j o r t r a c l i n g p a r t n e r . T h i s ' u v i l l n o d o u b t r e s u l t i n g r e a t e r t h r o t r g h p u t i n t h e r e g i o r r ' s p o r t s . C h i n a ' s r o b t r s t e c o n o m i c a n d t r a c l e g r o w t h r v i 1 1 contribr-rte further to the increase in container traffic movement in ports in the Sotrtheast Asian region, besicles its own.
In many Southeast Asian countries, the China phenomenol-l has resultecl in tl're investment ancl devc.lopment of all sorts of infrastrncture to support the explosion in trade with the country. At the forefront of infrastructure that enjoys the spillover from greater trade between the region and China are the ports, a c r i t i c a l f a c i l i t a t o r o f i n t e r n a t i o n a l t r a d e . B e t t e r i n f r a s t r u c t u r e a n d p o r t strprporting services, in ttrrrr, have becorne catalysts to greater clernands ancl f o r m o r e g o o c l s t o b e d e l i v e r e d f a s t e r a n d a t c h e a p e r c o s t s b e t r v e e n S o t r t h e a s t Asian nations, China ancl their other trading partners.
Many of the r,r,orlcl's top ports handled record throughput irr 2004, mainlv f u e l e d b y t h e f l o o d o f C h i n e s e e x p o r t s t o e v e r y c o m e r o f t h e g l o b e . R e f l e c t i n g e v e r - g r o n , i n g i n t e r - r e g i o n a r l t r a d e , c o r r t a i n e r i z e d t r a d e b e t l r r e e ' n C h i n a t r r r c l Sor.rtheast Asian countries is expected to grow across the boarrl tl-ris year. This bodes well for port throtrghptrt and port development in the region. Regional p o r t s s u c h a s S i n g a p o r e , P o r t K l a n g a n d T a n j u n g P e l e p a s h a v e b e n e f i t e c l trerrrendously from the flotrrishing Chinese economv, recording substantial
1 a a L J L
N n : . c r q , r \ r n r i S t c n t t n - Prosltccts f o r P o r t s i t r S o t r t l r c n s t A s i n g r o w t h i n i h r c l t r t h p t r t , a r r c l a r e \ , \ / e l l - p o s i t i o n e c l t o e n j o t z t h e p a t r o t ' r a g e o f C h i n e s e t r a d e .
C h i n a ' s s t r r g i n g t r a d e h a s c - l i r e c t l y a n d i n d i r e c t l y r e s t r l t e d i r r s i g n i f i c a n t charuges irr ASEAN lrn.tt. With rlver-incrcasirrg ir-rfemational rntrritirne corrtainer c a r g o l l l o v e l r r e n t i n a n c l o t t t o f C h i r r a a r r c l t h e c l e p l o y m e n t o f e v c r - l a r g e r containe'r ships to accommodate this, ser,,erai key hub ports in the regiorr have upgraclecl their facilities, even br,rilding ne\v or-res.
T h e p o s i t i v e v i b e s f r o m t h e j o i n t e f f o r t s i n r e g i o n a l cool'reratiorr b e t n , e e n China arrcl the Sotrthe;-rst Asi;rn resion lvill contintre to drive the economic growth i n t h e r e g i o n . A s i t i s , t r a d e b e t r v e e n th e t w o i s b o o m i n g , so much so that ships c a l l i n g a t p o r t s i n t h e r e g i o n \ \ / e l ' e h i t L r v c l e l a y s a n d c o n g e s t i o n s . M t r c h o f t h i s r v ; ' t s a t t r i b r . r t e d t o t h e s u r g i n e g l o b a l t r a d e r . o l t r m e s a s a r e s l r l t of the thrivir"rg Chinese e'conomy.rt This trnrlerlines the critical rreed for the ports t o e x p a n d a n c l u p g r a d e t h e i r c a p a c i t y t o a c c o m m o d a t e t h e h u g e a m o n n t of t r a c l e n , i t h C h i n a .
P R O S P E C T S A N D C H A L L E N G E S F O R P O R T S A N D S H I P P I N G I N S O U T H E A S T A S I A
There arc fer,r, factors more pronouncecl, more dominant and rnore recoqnizable t h a n C h i n a ' s r i s e i n e c o n o m i c a n c l t r a c l e g r o w t h . T h e i m p a c t o f t h i s a s c e n t has exertcd a notelt'orthy impact on trade, transportation, technoloel,, btrsiness o p e r a t i o r l s , e c o n o m i e . s a n d t h e d e v e i o p m c n t o f s e ; l p o r t s a m o r r g s t i t s t r a c l i n g p a r t n e r s , m o r e s o a l a r g e o n e l i k e t h e S o t r t l - r e a s t A s i a n r e g i o r r .
L i n e e r i n g c l o u b t s o v e r C h i n a ' s l o n s - t e r r n c o m m i t m e n t s i n t h e S o t r t h e a s t Asia rep;ion were allayecl to rest r,r'itl-r the ratification of the China-ASEAN a c c o r c l . 2 r T h e a g r e e m e n t i s e x p e . c t e d t o p r o v i d e a c c e s s to d u t 1 , - f r e e g o o c l s t o 2 b i l l i o n p e o p l e , r v h i c h s h o u l d a l l s r l r n , e l l f o r t r e r d e b e t w e e n C h i n a . r n c 1 t h e r e g i o n . r 5 M o r e s o , t h e d e r , e l o p r n e n t is e x p e c t c d t o h a v e a p o s i t i v e i m p a c t o n t l ' r e g r o r . r , t h o f p o r t s a n d s h i l - r p i n g in t h e S o t r t h e a s t A s i a n r e . s i o n t o f a c i l i t a t e the impenc-ling tracle. explosion. rr'
T h e r e i s a n u n m i s t a k i - r b l e tr e n c i f o r s h i p p i n g l i n e s t o commission the c o n s t r t t c t i o n o f b i g g e r c o n t a i n c r v e s s e l s to a c c o m r n o d a t e g r e a t e r g l o b a l t r a d e , m t t c h o f t v h i c h i s c t t r r e u t l v lrorvcred bv China's ecotromic gron'th ancl its goods t r a t r s p o r t e c - l b 1 ' 5 f i1 . T h i s i t r t t t r u [ a s i r r f l t r e t r c e d P o r t s i r r t h e S o t r t h e a s t A s i a ^ region to upgrade nrrcl improve their inirastructtrre to accomrrrodate strch sl-rips.
I n v e s t m e n t o n a c l c l i t i o n i - r i a n d c l c e p e n i n g o f b e r t h i s n e c e s s a r v t o m e e t t h e i n c r e a s i n g c o r r t a i r l L . r m o \ / e m e n t i n t h e r e g i o n a n d t o g a i n c o r r r p e t i t i v e e c - l g e i n a t t r a c t i r r g s h i p p i n g l i n e s f o r c l i r e c t c i ' r i l s a n d f a c i i i t a t e g r e a t e r t r a c l e n ' i t h C h i n a . E n e r g i z e c l b 1 ' s t r o n s p e r f o r n r a n c e in t r a c i e n ' i t h C h i n a , p o r t s i n t h e r e g i o r r h a v e e r l s o e x p a n d e c l a r r r d ir n p r o r , e c l n o t o n l V i n t e r m s o f i n f r a s t r t r c t t r r e a n d s o p l - r i s t i c a t e c l e q u i p r - n c n t b t r t t ' r l s o i r r t h c f t r n c t i o r r s . r n c l b u s i n e s s a c t i v i t i e s . M a n y h a v e a d d e d a n c l in r p r r o r . e d v a l t r e a d c l e d lo g i s t i c s a n d a n c i l l a r v s e r v i c c s to a t t r a c t
lnti, 13rlnttqnrr 70, L)rst'ntltcr 2005 T h e i n f l u e n c e of the ' C h i n a
f a c t o r ' o n t h e d e v e l o p m e n t of ports, a crucial f a c i l i t a t o r o f i n t e r n a t i o n a l tracle, has been favorable and looks set to color the:
ports scelle in the years ahead. Althotrgh the consequence of the irnpact may r r o t b e a p p l i c a b l e t o a l l t h e ports in the Southeast Asia region, some are r r t t t a b l e f o r t h e i r m a g n i t t r c l e a r n c l fo r m i r r o r i n g e l o b a l t r e n d s i n p o r t d e v e l o p r n e n t . T h e y i n c l u c l e aclr'ent in siripping technology anrl frractices, c o n c e n t r a t i o n o f r e s o r l r c e s a n d p r o c e s s e s , a n d d o o r - t o - d o o r d e l i v e r y s t r e t c h i n g a c r o s s t h e s u p p l v c h a i n . T h e s e h a v e b e e n d e t r i m e n t a l t o t h e p l a n n i n g , o r g a n i z a t i o n , d e v e l o p m e n t , management and operation of seaports in the region.
Ports in SEA and in nations engaged in trade with China n'ill have tcr acknowledge the fact that China is emerging as a rnajor plal,er in international r n a r i t i m e t r a d e . A s s t r c h , t h e y m u s t b e p r e p a r e d t o k e e p p a c e w i t h t h e infrastrtrctttre ancl resorlrces to facilitate greater trade coming in and goirrt o u t o f C h i n a r , if t h e r r d o n o t n , a n t t o b e ' le f t behind in capitalizing on China's p r o s p e r i t v . C h a l l e n e e s a r e a l r o u n d f o r 1-rort p l a r r n e r s i n t h e S o l r t h e ; r s t A s i a n r e g i o n t o p - r l a n t h e i r p o r t c l e v e l o p m e n t r , r ' e l l , e n h a n c e i n f r a s t r t r c t n r e , keep-r t r p d a t e d w ' i t h s t a t e - o f - t h e - a r t t e c h n o l o g i e s , i n c r e a s e productivity, organize operations efficiently, invest'uvisel_y and allocate resources effectivell' to cater to greater Chinese m;rritime tracle volume.
I f c u r r e n t t r e n d s a r e a n v i n d i c a t i o n , the next decade or so is poised to Lre itn even btrsier period for rnaritime trade. As the Chinese and the world econom)/
c o n t i n t t e t o g r o w a n d n e w m a r k e t s a r e opened via trade agreements, global m a r r i t i m c tr a d e w i l l i n c r e a s e a n d exert its impact on port c-leveloprnent. P o r t s , a r crucial colnponent of maritime transaction antl a facilitator of international trade, will be expected to play an immense role amidst this challenging scenario. More so for ports in the Southeast Asian region rvhose o\^rn prosperity depends largely on international trade from a major trading nation such as China.
I t i s e x p e c t e d t h a t w i t h C h i n a ' s c o n t i n n o u s r i s e a s a n e c o n o m i c prowerbroker, the futtrre development of Southeast Asian ports will be markecl by an iucreasing need to acleqr-rately support greater cargo voilrme and cater to ships with bigger czrpacitv and better technologv. They are expected to be more i n v o l v e d i n l o g i s t i c s s e r v i c e s , u n c l e r t a k e n either alone or via strategic alliances n , i t h l o s i s t i c s o p e r ; r t o r s . L o o k i r r g a t t h e r v o r l d r ' r ' i d e trend of ports' evolving r o l e , p o r t s i n t h e r e g i o n a r e s e e n t o a c t m o r e a s t r a n s i t points of cargos within t h e i n t e r m o d a l t r a n s p o r t n e t w o r k t h a n m e r e r e c i p i e n t s , p r o c e s s o r s a n d c1istributors of cargos.
Beyond carrgo trencls, changes in many elements r,a,'ill continue to chart the direction and growth of ports in the Southeast Asian region and beyonrl.
T h e s e in c l u d e t r a d e f l o w , e c o n o m i c d e v e l o p m e n t , government policies, cargo trends, shil-rping, technology*, trnd IT, among malry others. In keep-ring r,l'ith these chr-rnges ancl errer evolving trc'ncls, Sor-rtheast Asiern ports rntrst move in t a n d e m r v i t h t h c p a c e i n o r d e r t o r c m a i n r e l e v a n t , viable and competitive.
It is likely that the pursuit for greater trade with Chinar will exert influence on the role of ports in the re1;ion ancl the ltr&), they rt'ill be developed. It is foreseen that China's trade will result in significant changes in ports and shipping business. We rvill likely see amol1g others accelerated integration of ports and
1 - A
r J +
Nn:t'r'r/, Artrti Stt:tttm - Prospccts for Ports itt Soutlrcnst Asin
c a r r i e r s , s h i f t i n g t o r t ' a r d s d o o r - t o - d o o r s e r v i c e a n d l o g i s t i c s s o l u t i o n s i - r n d t h e f o r m i n g o f a l i i a n c e s a m o n g s t c a r r i e r s t o a c h i e v e e c o n o m i e s o f s c a l e . A l l t h e s e r ' v i l l h a v e a h u g e i m p a c t o n t h e w a y $ e l l t h e a s t A s i a n p o r t s a r e p l a n n e d a n d r t r n .
C O N C L U S I O N
B a r r i n g a n v d r a s t i c , u n f o r e s e e n c i r c u m s t a n c e s , C h i n a ' s e c o n o m v i s e x p e c t e d t o c h a r t i m p r e s s i v e g r o w t h i n t h e n e a r f u t u r e a n d i s l i k e l y t o b o o s t t r a d e w , i t h t h e r e g i o n e v e n f u r t h e r . S o u t h e a s t A s i a n p o r t s a r e e x p e c t e d t o r e c o r c l firmer gror,r'th in container volurnes in vears to conte, boosted by regional t r a c l e a s a r e s u l t o f t h e c o n t i n u e d f l o u r i s h i n g o f C h i n a ' s e c o n o m v . P o r t s i n the region rt'ill have to keep trp with this development and trends in order to gain competitive edge. ASEAN paved the way torvards more integration, c o o p e r a t i o n a n d a s t r o n g e r n a t i o n . I n d i v i d u a l c o u n t r i e s w o u l d n e e d t o support this notion to reap the opportunity from the robust growth of China's industrialization and development.
With the increase in export and import trade between the Sor-rtheast Asian region and China, the role of maritime transport services in facilitating t h i s t r a d e g r o w t h n ' i l l b e c o m e m o r e p r o m i n e n t . I n c o p i n g w i t h t h e r o b r - r s t g r o w t h , t h e s h i p p i n g a n d p o r t s e r v i c e s m u s t k e e p u p t o t h e c h a l l e n g e t o b e m o r e d y n a m i c . I t i s w o r t h y t o n o t e t h a t m a n y m a i n p o r t s i n t h e r e g i o n a r e p l a n n i n g f o r e x p a n s i o n i n t e r m s o f c a p a c i t y a n d f a c i l i t i e s t o c a p i t a l i z e o n t h e C h i n a b o o m . B u t C h i n a ' s e c o n o m i c a s c e n t w i l l c o n t i n u e t o p r e s e n t a m u l t i t u d e of challen€tes for the regional ports to build and improve on the foundation, t h e k i n d e n v i s i o n e d b y M a o , u p o n w h i c h s r e a t e r t r a d e c a n b e a c c o m p l i s h e d b e t r v e e n t h e t w o .
ENDNOTES
| C h i n a ' s e c o n o m y g r o w s 9 . 5 ' l ' i , i n 2 0 0 - 1 ' , C l r i t t n D n i l t 1 , 2 5 j a n t r a r v 2 0 0 5 . 2 U N C T A D R a t , i a t t , o , f M n r i t i n t t ' T r n t t s p o r t 2 0 0 5 , p . 2 .
3 Ibict.
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5 B i s h o p , J. ' C h i n a - A S E A N
F T A t o B o o s t l { e g i o n a l I n t c g r a t i o n - M c r r i l l L y n c h ' . X F N A s i a . P l t i l i p t T t i r t t , D n i l y I r r q t r i r t ' r , 1 Jr-rne 2 0 0 5 . S c e , h t t p : / / r , t , r , , r , , n , . b i i . r t e r a l s . o r g / a r t i c l e . p h p 3 ? i d _ a r : t i c l e = 2 0 0 1 ( a c c e s s e d 1 6 J t r n e 2 0 0 5 ) .
' ' ' A S E A N
s i g n s h i s t o r i c c 1 c ; - r l n ' i t h C h i r r a ' , C t r n r d i n r t , 2 9 N o v e t n b c r 2 0 ( ) . i .
; U N C T A D , I i ' i ' i c i l o f M o r i t i r r t t ' T r n t t s T t o r t 2 0 0 5 , p . 3 3 . s lbic-i., pr. 52.
e ' C h i n i i ' s
t r a c i e p e r f o r m a l - r c e ' , U S - C h i r - r a B u s i n e s s C o u n c i l r e p o r t , f r o m
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r 0 Yer)\t', J. 'China link-Lrp', Tltt' Strtt,1,1 November 2005.
l n t i , B i l n t t g n n 1 0 , D i s t t r t b a r 2 0 0 5
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13 UNCTAD, Rcuicru o.f Mnritirnc Trnnsport 2005, p.76.
1 r I b i d . , p. 7 6 .
r 5 Firth, C. 'Critical eye on Ningbo'. Tlrt, Cltittn Blsirrcs.s [ ? . c r t i t , i t t . F r o m h t t y l : / / w r \ / r v . c h i n a b t r s i n c s s r e v i e r v . c o m / p t r b l i c / 0 5 0 7 / c r i t i c u r l e y e . h t m l ( a c c e s s e d 2 9 /8 / 2 0 0 s )
r 6 UNCTAD, llcitiait, o f M n r i t i t r t t , T r n n s p o r t 2 0 0 5 , p . 1 1 . t 7 l b i d . , p . 7 9 .
I E Ibic1.
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2 0 ' C h i n a ' s E m e r g i n g Region-based Economy Offers Huge Opportunities for A S E A N ' , P e o p l c ' s D n i l r y O t r l i t r c , 2 2 O c t o b e r 2 0 0 5 . F r o m h t t p r : / / e n g l i s h . p e o p l e . c o m . c n ( a c c c s s e d 1 B N o v e m b e r 2 0 0 5 ) .
21 UNCTAD, Ilt'uiciu o.f Mnrititrtc TrnttsStort 2005. p.4.
2 2 Clarkson Research Stuclies (2005), Shippinu Reuictu nrrd Outloolc, p.69.
2 i F ; r r r g , N . ' B o o m i n g
t r . r d e a t P S A t c r m i r r ; r l s ' , B t t s i t t c s s T i t t t t ' s , 2 9 June 2004.
r ' 1 The China-ASEAN pact her;rlc1s China's mnltilateral approach to irrcrease its sphcre of influence in the region via trade and economic cc-roperation. At the core of t h i s s t r a t e g y a r e f r e e t r a d e a g r e e m e n t s s n c h a s t h e a c c o r d a n d r e g i o n a l f i n a n c i a l cooperation among East Asian countries. See Kuik, C.C. (2005), "Multilateralism in C h i n a ' s A S E A N P o l i c v : I t s E v o l u t i o n , C h a r a c t e r i s t i c s a n d A s p i r a t i o n s " , i n C o n t a r r r y l o r n r t l S o r L t l r n s t A s i n , Y o I . 2 7 , N o . 1 , A p r i l 2 0 0 5 , p p , 1 0 2 - 1 2 2 f o r a d e t a i l e d c l i s c t r s s i o n o n C h i r r a ' s r n t r l t i l a t e r a l a p p r o . r c h i n i t s f o r e i g n p o l i c y t o w a r d s S o u t h e a s t A s i a .
2 5 B o y d , A . ( 2 0 0 4 ) , ' A S E A N , C h i n a a l l s m i l e s f o r n o r v ' , A s i a T i m e s O n l i n e , 3 D e c e r r r b e r 2 0 0 4 . F n r m n ' w r v . a t i m e s . c o m ( a c c e s s e d 3 0 N o v e ' m b e r 2 0 0 5 ) .
2 { ) It has bee'n argr.red that Sotrtheast Asian nations are "bandr,vagoning" with C h i r r a o r r l y t o t a p i n t o i t s e n o r m o u s t r a d e p o t e n t i a l a n d v a l t r e m a i n t a i n i n g c o r d i a l relations ir-r cognizance of its potential to become a slrperpower. Hon'ever, it would be hard lo argue that China's actions in the region thus far have been anything but n e i g h b o r l y a n d t h a t t r a d e a n d e c o n o m i c i n i t i a t i v e s i n v o l v i n g A S E A N a n d C h i n a have rrot been beneficial to the reqional economies.
1 3 6
