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Shanghai builds new shipping hub

By Zhou Yan (China Daily)
Updated: 2009-08-31 16:47

Following the success of Lujiazui in its bid to be a premier financial hub, Shanghai's Hongkou district has embarked on an ambitious plan to become a center for the shipping industry.

The project, covering a total area of 3.66 sq km in the district, is better known as the North Bund, will include a complex comprising office buildings, hotels, shopping malls, and a 400,000 sq m cruise ship terminal that can accommodate four large ships at a time.

The first phase of the project that includes the cruise ship terminal was completed last August.

The second phase, which centers on the Shanghai International Shipping Service Center and consists of an office complex and various public amenities, is under construction and will be completed in stages during the next two years.

Preparation for the third phase involves considering whether to relocate the residents of large tenement blocks in the area.

In the planned location are some historical sites, including a pre-World War II Jewish settlement and the Xiahai Temple.

Second phase

The Shanghai Hongkou district renovation project is under way. The district government has decided to build Hongkou into a shipping industrial center in three phases, and the second phase is planned to be completed during the next two years. [China Daily]

"We're currently in the second phase, focusing on developing our cruise ship industry," Yu Beihua, governor of Hongkou district, told China Business Weekly.

In the first half of this year, a passenger throughput of 80,000 was reported at the terminal.

Cruise ship trips have become a new leisure activity for young people in Shanghai.

Tao Yingying, a fashion designer for a foreign company, has taken two cruises.

"I took Royal Caribbean's Rhapsody of The Seas (cruise) for the first time in October 2007 to travel around Australia, which was an amazing experience. You can dance, watch live shows, swim and even karaoke on the cruise," Tao said.

She embarked on another cruise a few months ago that took her from Shanghai to South Korea.

"The price of about 3,000 yuan for a four-day trip is affordable for white collar workers like us," she said. "The cruise ship was almost packed."

Wu Xuemei, an officer from the terminal's business office, said a new cruise ship from Costa Cruise with a 2,000-passenger capacity is scheduled to soon replace the company's 1,700-passenger Costa Allegra due to mounting customer demand.

In addition, a cruise ship from Italy's Mediterranean Shipping Co signed an agreement to make Shanghai a home port in China for its international route.

Cruise lines

"We anticipate the number of cruise ship passengers using the terminal to exceed 300,000 next year, when Shanghai hosts the World Expo," Yu of the Hongkou district said.

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The 23.5 sq km Hongkou district, home to China's first Western hotel (the Astor House), has also been adopted by international cruise lines as their home port in China.

In July 2006, Costa Allegra from Carnival Corp berthed at the North Bund, where the Huangpu River is at its deepest.

Past experience shows that the potential for the development of the cruise business exists when a city's per capita GDP reaches the $8,000 level, analysts said.

Shanghai's per capita GDP rose from $10,000 to $10,529 in 2008.

Li Li, deputy director of the North Bund Development Office, said that the local government plans to invest about 6 billion yuan in building the 800 m dock for the cruise business, excluding the land value.

"Our district hosts the largest number of shipping and logistics companies, thanks to our sound shipping-related infrastructure," Yu said.

"Based on this, we'll further develop our tertiary industry by focusing on providing modern shipping services, " Yu said.

Regional offices

The district governor added that the district on the east bank of Huangpu River has attracted 2,400 big shipping and logistics firms from home and abroad to set up regional or national headquarters in the area.

The companies include, China Ocean Shipping (Group) Co, China National Offshore Oil Corp and Shanghai International Port (Group) Co.

Yu said the local government has earmarked 30 million yuan in capital to attract more large companies.

On top of that, a Canary Wharf-styled zone has been under construction to promote Hongkou as one of Shanghai's economic "Golden Triangles" with Pudong New District's Lujiazui Financial and Trade Zone, as well as the bordering Huangpu District's Bund.

"When the Shanghai International Shipping Service Center is completed, we'll see firms that engage in shipping, finance companies and associations such as the Shanghai Shipping Exchange moving into the area," Yu said.

Local shipping firms in the region contributed to 18 percent of the district's total tax revenue in 2008, Yu said.

"We expect the figure to rise to over 25 percent in 2015," he said.