Qingdao, China – Leading the way in the “green” economy

Qingdao is a key economic center and coastal city located at the southern tip of east China’s Shandong Peninsula. It is one of China’s main ports for foreign trade and an important base for ocean research.

As the seventh largest port in the world, Qingdao Port, is gearing up to make itself the international freight centre of Northeast Asia, constructing a series of new docks and developing a newly approved bonded area. In 2008, business at the port increased by 13 percent despite a gloomy economy. From January to July 2009, traffic and revenues at Qingdao Port enjoyed a 5 percent year-on-year growth.

 Due to the recession in the marine industry, in the last quarter of 2008 Qingdao Port saw a decline in the numbers of ships calling at the port, leading to overstocking and port congestion. In response to the severe situation, the ports management unveiled emergency preplans. It strengthened control over all the wharfs, storage yards, warehouses, human resources and instruments within the port. This was aimed at maximizing resource efficiency. While at the same time, it carried out a precision management plan to increase profits and reduce costs. “In this crisis, our enterprise has to grasp opportunities for development,” said Chang Dechuan, Chairman of the Board of the Qingdao Port. “We aim to build an energy-saving and environmentally- friendly company, establishing a sound base for future development.”

Port of Qingdao Expansion Projects

 As part of their development plan, Qingdao Port has been seeking to cooperate with renowned shipping companies and cargo owners to invest in projects that will aim to jointly reduce risks and increase safety.

 Tian Guangwen, Vice President of Qingdao Port Group Co Ltd, says the first project being built is an iron ore dock at Dongjiakou, south of the port’s 117 year old base in Kiaochow Bay, and that it requires an investment of 3 billion Yuan. Its partner will be Brazilian mining giant Vale, the largest iron ore producer in the world. Vale, which lists China as its main market, is planning to complete 16 ships, each with a capacity of 400,000 deadweight tons (dwt), and is expected to launch the first ship later this year. Due to the increase in the ship sizes they expect that each ship will save 30 percent in costs. “How huge a ship can be depends on how huge a dock we have,” said Wang Baosheng, vice head of the group’s business department for the Qingdao Port.

The new dock at Dongjiakou will be the first in China to accommodate the ships large enough to carry 400,000 tons of material. Once projects at Dongjiakou are finished, the Qingdao Port is expected to surpass Pusan Port in South Korea, and realize its goal to become the international freight centre of Northeast Asia.

 As part of its expansion plan, Qingdao Port also is developing a bonded port area to attract more domestic and international resources. The Qianwan Bonded Port Area, approved 1 September 2009, is the seventh of its kind in China. The area will provide bonded service for foreign and domestic cargo.

“It will boost development of Qingdao Port in the future. Companies will enjoy convenient customs formalities, favourable tax policies, less trade restrictions and so on,” stated Wang. Ren Minqiang, Head of Qingdao Qianwan Container Terminal Co Ltd, (QQTC), says the bonded area is a chance for the port to become an international container transfer facility. “We should take advantage of the policies and increase container quantity first, then attract cargos from Pusan Port with our great service,” says Ren.

Green Port Scheme – For a sustainable future

In new “green port” collaboration between the Port of Long Beach and China Merchants Holdings International (CMHI), a comprehensive environmental exchange agreement was signed to further “green” technologies and practices on both sides of the Pacific Ocean. “This agreement recognizes that we are not only partners in trade, but partners in ideas and solutions that safeguard our environment and ensure a sustainable future for our seaports,” said Nick Sramek, Port of Long Beach, Board of Harbor Commissioners President. The agreement signed in Qingdao, 12 November 2009, is the fourth such agreement the Port of Long Beach has signed with partners around the world in an effort to globalize cutting edge environmental technology and policies. The Port of Long Beach has pioneered environmental stewardship with its landmark Green Port Policy, Clean Air Action Plan and innovative initiatives such as the Green Flag and Clean Trucks programs.

China Merchants Holdings International is the largest public port operator in China, with a nationwide port network that includes coastal hub ports in Hong Kong, Shenzhen, Ningbo, Shanghai, Qingdao, Tianjin, Xiamen Bay and Zhanjiang. “Stepping into a new phase of development, this agreement signifies that CMHI is determined to build a sustainable company and environment through strategic green port policies,” said Liu Yunshu, Executive Director/Deputy General Manager of CMHI. The two entities will collaborate on environmental issues such as marine wildlife, air quality, soils and sediments, water quality, sustainability and community engagement. The agreement covers the exchange of technical information on improving air quality, the establishment of joint delegations to study port emissions and pollutants, as well as the ongoing development of control measures and best practices surrounding port and urban sustainability policies.

“Blue Economy” is the Future

In following the international trend towards scientific exploitation of the oceans, Shandong is striving to go green during its transformation into a “blue economy”, said Shandong Province Governor Jiang Daming. The blue economy works not only as an economic operational model but is also a new model for economic development in Shandong.

 A proposal was put forward to establish a blue economic zone on the Shandong peninsula with Qingdao at its head following an instruction issued by President Hu Jintao during his visit to the region in April, 2009. Speaking at a press conference on 26 August 2009, Qingdao Vice Mayor Zhang Hui said, “Compared with a traditional ocean economy, the blue economy is a new model with richer content, encompassing the comprehensive use of various marine resources, nourishing the core competitiveness of the ocean economy, cultivating some marine-related industries, protecting the ocean’s ecological environment and conserving energy.” Zhang also highlighted Qingdao’s natural advantages in developing such an economy from the perspective of its geological location, research and development tradition in marine sciences and quick rise as an important maritime and air traffic hub. During the next stage of Qingdao’s development, the city will further increase its advantages in its five pillar marine industries of shipbuilding, marine engineering, marine chemistry, seawater use and marine pharmaceuticals. By 2015, the city is expected to develop an annual shipbuilding capacity of 6 million deadweight tonnes and a daily seawater desalination capacity of 250,000 tons. The city will seek marine science breakthroughs in core technologies and fundamental sciences in coastal erosion, extraction of useful substances from marine organisms, seawater desalination and underwater welding. The local government will offer incentives to companies in these industries, grant scientific awards and honors and encourage research staff to apply for patents.

2010 – A year to grow

As the Chinese port industry showed a clear sign of recovery at the end of 2009, it is believed that 2010 will be a big year for the industry. Therefore, port operators are seeking solutions to secure future growth, in order to stand out after the economic crisis. Capitalizing on this growing need Noppen, a leader in organizing business information conferences across the Chinese market for over ten years, are holding their “2nd Annual China Port Expansion and Efficiency Summit 2010” in Qingdao. Co-organized by the Qingdao People’s Municipal Government, this event will bring together the most prestigious leaders from the port industry to explore solutions for port long term growth and to update on the latest port expansion schemes.

The summit will also be the perfect place to present products and services to Asia-pacific port industry decision makers. With Noppen’s vast experience across the Chinese market, close relationships with the many levels of government and unique conference style, the event is sure not only to be a success but a significantly positive occasion for the Qingdao Port industry. The “2nd Annual China Port Expansion and Efficiency Summit 2010” is also part of Noppen’s cooperation agreement with Dongjiakou Port to support their ongoing port project, expected for completion in 2015. Port operators from costal cities, such as Dalian, Shenzhen, Shanghai, and Guangzhou will attend the event with the aim of enhancing business opportunities and the success of Dongjiakou’s Port Project.

For further details on this event contact Catriona Scanlon, Communications Director, at catrionas@noppen.com.cn.