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Shanghai would "capitalize on the unprecedented opportunity" to build its logistics industry with preferential policies, coordinated planning and investment. Hu Yanzhao, vice mayor of Shanghai made these remarks at a conference entitled "Promoting Shanghai's Logistics Industry" on Monday.

In the next five years the city will work to secure an annual 10 percent increase of added value for its logistics industry. This would assist with the initial establishment of a modern logistics system with an international competitive edge by 2010. By then Shanghai will have obtained prime status as an international logistics terminal and one of the Asia-Pacific hubs in this market.

Statistics show the business of logistics has become one of Shanghai's anchor industries. In 2005 the city became the world's largest freight port with the volume of goods handled reaching 678 million tons -- 443 million tons of which were harbor traffic.

The city's cargo container handling capacity is ranked after only Hong Kong and Singapore with  18.084 million boxes of goods being moved -- an increase of 24 percent over last year's 14.56 million boxes. The added value for Shanghai's logistics industry in 2005 was 255 billion yuan (US$31.6 billion) which accounted for 13 percent of its total GDP or 25 percent of the city's service industry.

Chen Haigang, deputy director of the Shanghai Municipal Economic Commission, described the city as being at the point of building itself up into a "logistics empire."

In 2006 the city is stepping-up its investment in the logistics industry and will move to standardize various areas of the business. It will continue with its efforts in building up an integrated logistics facilities network involving river, rail and marine transport. Preferential policies for the logistics enterprises will include priority use of land resources in industrial zones and tax concessions. In addition a number of tax-free zones have been set up to allow for the smooth development and growth of the industry.

To assist foreign logistics enterprises in locating their Asian-Pacific headquarters in Shanghai, the city will focus on developing all the services required to support the growth of the industry.

Construction of 10 key logistics projects with a total investment of 5 billion yuan (US$620 million), including the Yangshan Port logistics base backed by the Oriental International Holding, is to be accelerated.

In addition to these facilities, the city also cooperates with the Fudan University in personnel training and logistics research by setting up a Logistics Research Institute.

(China.org.cn by Wind Gu, March 15, 2006)