Pearl River Delta volumes threatened by factory migration inland

SHENZHEN and other Pearl River Delta ports are being threatened by the relocation factories and the opening of new ones in central China in a shift from coastal provinces, according to the UK`s Port Strategy journal.

The relocation to the interior has contributed to Shenzhen being the mainland`s worst performing major port last year with local volume rising only 0.27 per cent to 22.57 million TEU against Shanghai`s which rose throughput up 9.2 per cent to 31.74 million TEU, said the report.


David Lammie, of Yangtze Business Services, told Port Strategy that Shenzhen mostly serves manufacturers in Guangdong province, and many of these are relatively low-tech or low-value-added companies, drawn there initially because of low wages.


"As wages have risen in the coastal areas and labour shortages have arisen - Guangdong is very dependent on migrant labour - many factories have moved to other parts of China or even other countries elsewhere in Asia," he said.


"This trend, along with the global economic downturn that has impacted overseas demand for Chinese goods, has hit Shenzhen relatively hard and explains why Shenzhen, and other coastal ports, is working hard to improve connections with inland cities such as Chongqing that are enjoying some of the fastest GDP and inward investment growth rates in China," said Mr Lammie.


"Therefore, Shenzhen is playing to the shift by aggressively building rail links to the interior to transport containerised cargo. It currently has 15 container rail connections to cities such as Chongqing and Kunming. This year it will open two new container rail lines, one to Xian and another to Zhengzhou," said the report.