Foreigners still wary of Chinese port investment

Overseas companies are notable by their absence in funding harbour construction, he commented, while small private investors are not represented at all. “Apart from some specialist piers, almost no private capital is involved in harbour construction in Ningbo so far, ” he noted.

In contrast, Yong Xin Harbour Co Ltd, a local private company operating a multipurpose pier in Ningbo, is building new facilities, although recognises the need for around US$24.2m of new investment, which it believes will not be difficult to source.

However, this is an exception.

The inability to attract overseas capital could result in a major crisis at Chinese ports.

In 2004, for example, some 2.7bn tonnes of capacity was required by the transport industry and the country’s maritime facilities, but only 2.2bn was actually available, according to China Ports and Harbours Association.

Furthermore, China needs more specialist ports infrastructure and also dedicated facilities for products such as coal, oil and minerals.

Commenting on this growing shortfall in capacity, Wang Yuanjing, deputy director of the Policy Research Office:

“There are no more policy obstacles against investing in port projects by overseas and private capital. In fact, the government has drawn up a number of industrial policies and laws to attract money.

But more flexible implementation is required to put all the favourable policies into practice and to diversify investments sources.”

One of the main impediments facing foreign investors is the problem of not being able to control day-to-day management of their terminals, as well as not being able to exercise the pricing of operations to the extent that they would wish. A growing number of commentators in China are therefore calling upon state bodies to relinquish the degree of control they currently exercise over ports and terminals.