Not all fast forward for China, despite ambitions

Mr Chow said due to overcapacity, “the incentive to build new ports is low”, so investments in the next five years will be spent in upgrading and enhancing the existing ports.

He explained that existing overcapacity combined with the still bleak economic outlook in America and Europe is affecting Chinese port businesses. Mr Chow went on to say, “The great challenge will be how infrastructure will be developed to connect existing Chinese ports with the western provinces to facilitate the shift of economic activities to those inland provinces.”

However, he added “a lot of ‘hot money’ is available” – created by the 2008 stimulus plan – and it is now looking for a home: “China’s ports are still good investment assets,” he concluded.

A last word of advice from Mr Chow, is that if you are looking at a feasibility study, you need to see the legal documentation for the port development, the planned infrastructure committed by the local or provincial governments – and a solid port cargo forecast.

Ander Chow will be presenting a paper at IQPC’s Port Planning & Design China 2011 this August.