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1 State of China’s Logistics and Potential Business Opportunities

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Overview of the development of China's logistic infrastructure and industry; identifying potential obstacles and opportunities for investment

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Page 1: China logistics industry  trends  investment opportunities_2011

1

State of China’s Logistics and

Potential Business Opportunities

kcyoon
Typewritten text
BY: KC YOON GLOBAL CHINA CAPITAL Mobile: 18675573803 Email: [email protected]
kcyoon
Typewritten text
CONFIDENTIAL
Page 2: China logistics industry  trends  investment opportunities_2011

2

Section One- State of China’s Logistics - Challenges & Future

Growth

� State of China’s Logistic Market � Market Characteristics � Understanding the Costs and Challenges � Industry Trends and Drivers � Future Market Potential

� Laying China’s Logistic Infrastructure � Current and Future Transportation Infrastructure � Logistic Hub, City and Passage Development � Chinese Government’s Support for Industry

� Leading Logistic Players in the Market � Leading Domestic & Foreign Players � Recent Business & M&A

Page 3: China logistics industry  trends  investment opportunities_2011

� Market size of Logistics industry in China set a new record high in 2010, at US$15.75 billion, with growth of almost 30% Y-o-Y.

China Market Becoming Attractive

Market Size at Record Manufacturing Bias

Source: KPMG

Source: KPMG Source: National Development & Reform Commission

2009 Value

(bn RMB)

Yoy

Growth

Mkt

Share

Agricultural

products 2,236 43% 18%

Industrial

Products 113,103 14.6% 90%

Imported

Products 9,431 22.1% 7.5%

Recycled

products 446 39.5% 0.4%

Comm & Pers

Products 198 14.7% 0.2%

Total 125,413 15%

� Industrial products has a 90% share of the goods transported.

Logistic market growing and in-transition- offers new business opportunities

Page 4: China logistics industry  trends  investment opportunities_2011

� Measures logistics value to GDP ratio, increasing since 2006;recovered from the financial crisis from 2.9 to 3.2 in 2010

Market Demand on Increase

Market Demand Recovering Expansion of Value-Added

Source: CFLP Source: CFLP

� Logistic value-added showing market expansion since 2006- value-added increasing at rate of tiertary (service) sector

Market for logistic services on the increase with broad-based demand

Logistic Demand Coefficient

Page 5: China logistics industry  trends  investment opportunities_2011

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Source: National Development & Reform Commission

Transportati

on

55%

Management

12%

Warehouse

8%

Other

Storage

25%

Breakdown of China’s Total Logistics Cost

(2009)

Logistic Cost as % GDP High Transport is Major Cost

Logistic Cost High vs Global Peers

� Chinese total logistics cost is high (at Rmb7100Bil in 2010) with low logistics efficiency (China ratio is 17.8% vs USA 7.7%).

Chinese logistics has significant room for cost & efficiency gains..

� Transport and labor costs account for typically 60% of Chinese distribution center cost structure vs 8-10% for US/Japan

Source: ATKearney Report Chinese Logistics 2015

Page 6: China logistics industry  trends  investment opportunities_2011

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Challenges faced …

China’s Logistic Industry Large but Undeveloped..

Logistic practices not upto global standdards..Foreign companies only

allowed into sector in 2005 and still not fully plugged-into the market

Lack of modern logistic

facilities and sufficient

warehouses space

Poor penetration by 3PLs;

spend on 3PL only 2.7% in

2009 vs 30% for EU

3PL3PL3PL3PL

Poor use of logistics i.e. lack

of cold-chain logistics; poor

planning tools

2009 China Other

% Coldchain 10% US/JPN: 80%

ME: 50%

Number.

refrigerated

trucks

60,000 US: 250,000

JP: 150.000

Source: GZ Cold-chain Logistics Assoc.

Business Development Needs to Consider -Infrastructure to Planning

Page 7: China logistics industry  trends  investment opportunities_2011

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Industry Trends (1).. Economic Shift – Movement of Manufacturing

Locations to the West

Source: CB Ellis

Increasing Land and Labour cost of coastal cities driving manufacturing

factories to move into the hinterlands- for both YRD and PRD… benefiting

new logistic hubs like Wuhan, Chengdu, etc

Coming Demand & Growth in Logistics due to

shift in Manufacturing to Western China

Page 8: China logistics industry  trends  investment opportunities_2011

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Industry Trends (2)..

China’s Strategic Shift towards Consumption Drive Demand

Source: PWC Report on Asia Retail 2010

Demand for sophisticated retail logistics management & warehouse space from

the expansion of global retailers Walmart, carrefour plus other retail/consumer

brands from coastal into rural and inner cities creates demand

Expansion in Online

Shopping similarly adds

to demand

De-regulated environment

allows foreign participation

In China retail

Modern Logistic a pillar in

“China’s 11th Year Plan”

IMF estimates that by 2025,

retail will dominate

75% of domestic logistics

Asia Retail Forecast 2014

Coming Demand & Growth in Consumption-Driven Retail Logistics

offers new business opportunities

Major consumption centres are building up inland i.e. Strong retail sales for

past 3 years in Chongqing, Changsha, Chengdu, Xian where logistics will be

required to transport consumer goods to these cities.

Page 9: China logistics industry  trends  investment opportunities_2011

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Industry Trend (3) …

Market in Growth Stage with Increasing Competition

Market is fragmented (Top 20 operators with 6% of total revenues); Dominated

by companies with limited scale/limited service scope. M&A Trend as Govt

push to nuture domestic giants; interest from foreign players looking for an

entry into the Chinese market

Source: ATKearney Report on Chinese Logistics by 20 15

Fragmented & Growing market – Opportunity for Consolidation to become

Market Leader

Page 10: China logistics industry  trends  investment opportunities_2011

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Industry Trend (4) …

Build-up of Nationwide Transportation Network

Currently China suffers one of the heaviest freight density in the world- driving up

transportation cost. In 2009-2010: RMB 1.4 trillion invested in rail network. By

2020- 120,000km highspeed railway network to be completed- dramatically

improve speed of delivery and nationwide access

Rail Network brings significant new efficiencies in land transportation;

New hubs will be created

Rail Network 2020

HubsHubsHubsHubs

Continued Investment in Transportation Infrastructure

Source: China’s Future Transport Infrastructure , T singhua University

Page 11: China logistics industry  trends  investment opportunities_2011

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Industry Trends (6)

Market Demands Improvements in Efficiency

With increasing market competitiveness, efficiency gains from improved

logistic management critical to firms remaining competitive; Domestic firms

investing in advanced SCM IT system and online logistics

Source: Fraunhofer IML

Advanced SCM Platform eLogistics

Opportunity to bring world-class SCM capabilities as Value-added

Page 12: China logistics industry  trends  investment opportunities_2011

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Industry Trends (7)

Development of Domestic 3PL +Rise of Outsourcing

Currently only in China 2.7% outsource vs 15.7% global norm but market

segment growing at 25% annually vs overall logistics- By 2013 China expected

to be largest contract logistic market in Asia-Pacific reaching RMB183.5 billion

market value.

0

20

40

60

80

100

120

140

160

180

200

2003 2004 2005 2006 2007 2008 2009 2013F

China’s Contract Logistics Market

Source: Transport Intelligence, Colliers Internatio nal

RMB billion

Contract Logistics Market Forecast (2009-2013)

Geographies CAGR

Asia 12.8%

Western Europe 6.5%

North America 9.8%

Global 9.5%

China 20.6%

Source: Transport Intelligence, Colliers Internatio nal

Inter Asia Trade Forecast (2010-2015)

2010 30.1 million TEU’s

2015 44.1 million TEU’s

Potential to build 3PL market hub leader leveraging global skills

Page 13: China logistics industry  trends  investment opportunities_2011

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Source: NDRC and Nankai University

Outsourcing Rate Increasing Outsourcing Characteristics

Case Study: Outsourcing Trends

� Survey of Chinese enterprises shows outsourcing volume increasing to 61% in 2009 from 35% in 2005 (does not reflect whole market only sample)

Market for more sophisticated 3PLs on the increase..

� Enterprises outsourcing more of internal logistics especially transportation & distribution functions; future needs are advanced logistic functions

Source: Extracts from NDRC and Nankai Survey

Outsourcing Vol. Domestic Enterprises

70% enterprises surveyed outsourced

more than 50% of logistic functions; while

40% outsourced more than 80%

Types of Functions Outsourced

Future Planned Functions Outsourced

Page 14: China logistics industry  trends  investment opportunities_2011

Future Growth for Logistics Market

China Market to Reach US$ 450 billion

Market demand, the development of transportation infrastructure plus

availability of world-class logistic facilities and systems will support the

overall upgrading of China’s logistic market

Consumption-related

Spend will drive 5 key

logistic segments!

Source: ATKearney Report on Chinese Logistics by 20 15

Express

Road freight

Air freight

Intl freight fwding

3PL outsource

Broad growth in market segments and various transport modes

Page 15: China logistics industry  trends  investment opportunities_2011

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Section Two- State of China’s Logistics - Challenges & Future

Growth

� State of China’s Logistic Market � Market Characteristics � Understanding the Costs and Challenges � Industry Trends and Drivers � Future Market Potential

� Laying China’s Logistic Infrastructure � Current and Future Transportation Infrastructure � Logistic Hub, City and Passage Development � Chinese Government’s Support for Industry

� Leading Logistic Players in the Market � Leading Domestic & Foreign Players � Recent Business & M&A

Page 16: China logistics industry  trends  investment opportunities_2011

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Transportation Network Long Term Goals

Transportation Infrastructure Build-up Plan (I)

Source: Research Centre for Modern Logistics Tsinghua University, National Bureau Statistics

Transportation accounted for 75% of the RMB 3 trillion investments in logistics in 2010.

Early phase of transportation network build-up focused on road and deepwater ports in support of

the manufacturing and export demand. Chinese ports rapidly led in world container traffic

Early Phase

Focus

Priority on transportation reflects Govt priority on improving logistics

Page 17: China logistics industry  trends  investment opportunities_2011

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Transportation Capacity

Traffic Capacity by Transportation Modes

Source: National Bureau Statistics

Road Transportation remained the primary mode for passenger and freight traffic while air

transportation mode saw the strongest rise. While road traffic capacity has increased…

MILEAGE PER CAPITA CHINA VS US ONLY 10%

Current capacity relies on road transportation which is still restrictive

Page 18: China logistics industry  trends  investment opportunities_2011

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Transportation Network Long-term Goals

Transportation Infrastructure Build-up Plan (II)

Source: Research Centre for Modern Logistics Tsinghua University

Primary goal from 2010 to 2020 is to ramp up the domestic transportation network to support the

growing, broadening and deepening of the domestic consumption-focused economy

20

10

to 2

02

0

Recognising this focus- identify rail/coastal ports for early partnerships

Page 19: China logistics industry  trends  investment opportunities_2011

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Roads and Expressways Network 2020

Multiple Highways & Trucking Hubs (42)

Source: Research Centre for Modern Logistics Tsinghua University

Page 20: China logistics industry  trends  investment opportunities_2011

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Rail Network and Hubs 2020

Railway Container Hubs (18)

Hub

Source: Research Centre for Modern Logistics Tsinghua University

Page 21: China logistics industry  trends  investment opportunities_2011

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Case Study: China Rail

Opportunity and Challenge

Source: Research by Zheng Wan , University of California

Xiang Liu, University of Illinois Urbana-Campaign

• Major passenger carrier

• 2007: 1.4bn pax;3.2bn tons goods

• 2007-2012: US$300bn invested

Using Force Field Analysis as decision-tool - Insights into future development of

the Chinese rail transport system appears to be positive

Growth of China Rail

Energy Saving Most energy efficient

transport mode cpr to

Japan’s rail system

3 3

5 5

4 4

5 5

Social Demand Already high load density

but demand outstrip supply.

Need further expansion

Container Transport Development crucial for

inland economy; increase

share of land transport

Govt Support Financial & policy support

plus independent Ministry

of Railway

17

Competition Intense competition from

other transport modes esp.

road with heavy investment

Poor Financing High construction capex

funded through domestic

bonds; limited flexibility

Limited Profitability Profit margin 1-2%; Low

pricing esp passenger as

viewed as public service

Strict Control Viewed as strategic asset

with semi-military control;

lacks market flexibility

3 3

3 3

4 4

4 4 13 VSVSVSVS

Driving Force Restraining Force

Page 22: China logistics industry  trends  investment opportunities_2011

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Coastal and Large-Scale Ports

Vibrant World-class Port Network

World Ranking of Container Ports

Source: Research Centre for Modern Logistics Tsinghua University

Page 23: China logistics industry  trends  investment opportunities_2011

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Civil Airport Network in 2020

Core Hub Formed by BJ, SH, GZ Airports

Source: Research Centre for Modern Logistics Tsinghua University

Sub-hubs in each Geographical area with

International, Regional and Trunk Airports

North-West Hub Northern Hub

China Eastern Hub

China Southern Hub

South east Hub

Source: Research Centre for Modern Logistics Tsinghua University

Page 24: China logistics industry  trends  investment opportunities_2011

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Current Developments -Logistic Hub/Pks

Total of 1300 + Logistic Parks have been Developed

• 85% supported by local govt

• Govt build infrastructure

• Special tax incentives for tenants

• Cluster development

• Value of land increase primary

motivation for investment

• Overcapacity- only 40% utilization.

• Corruption contract allocation

• Design not meet business needs

• Lack multimodal transport

A Crowded market.. Need to offer unique proposition

to stand out against Competition

Page 25: China logistics industry  trends  investment opportunities_2011

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Logistics Hubs Bloom Across China

5 Major Logistic Hubs Across China

Broadly classified into 3 categories (1) Primary hubs are the leading coastal cities

of Shenzhen/Guangzhou; Shanghai and Beijing/Tianjin (2)Secondary hubs are

extensions from the primary (3) Emerging hubs are in the inland and have risen

priomarily due to strong retail/consumption story

Source: Research Centre for Modern Logistics Tsinghua University

Page 26: China logistics industry  trends  investment opportunities_2011

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Examples of Primary Hubs

Primary Hubs are formed from the Early Economic Zones

A significant number of logistic parks and warehouse facilities have already co-

located within these hubs

Harbor City Tianjin-Bohai Bay

Shanghai Hub

PRD Hub

Source: Research Centre for Modern Logistics Tsinghua University

Page 27: China logistics industry  trends  investment opportunities_2011

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Logistic Cities

City Locations with Logistic Potential

State Council designated Cities due to being part of air, land or sea transportation

nodes; State Council also identified 10 logistic passages with key traffic volume

Need for in-depth study to study opportunities offered by cities

• 21 Nationwide Junction cities

• 17 Regional Junction cities

Source: LiFung Research

Page 28: China logistics industry  trends  investment opportunities_2011

Recent Chinese Policies Supporting

Logistics Market

1. To reduce tax burden for all logistics companies effectively

2. To increase support for Logistics Land Policy

3. To promote and facilitate convenient passages for transportation vehicles

4. To improve management of logistics enterprises

5. To encourage integration of logistics facilities and resources

6. To promote innovation and application of logistics technology

7. To increase investment in logistics industry

8. To promote development of agricultural logistics.

28

Under 12th Five Year Plan by NDRC- Logistics Key Focus

Leverage on Chinese Govt Support to Drive Growth of Logistic Hub

Eight key preferential terms for logistic market

Targets set by NDRC

& CFLP by 2015 • Total Logistics value grow at CAGR 14%

• Logistics Value-added increase at CAGR 15%

Page 29: China logistics industry  trends  investment opportunities_2011

High-Level Co-ordination Still Weak..

29

G to G efforts would be required to ensure nation-wide co-ordination

Lack of co-ordination among Govt Dept leads to multiple jurisdictions and limits development

of logistic industry; provincial level authority still exerts influence and impacts industry

Re-Org of Govt. Dept Constraints at Provincial

Level

� Functions of government

departments regulating civil

aviation, postal services,

communications and urban

public transportation

consolidated under

establishment of Ministry of

Transport in 2008

� Other dept still responsible

for monitoring different

aspects of logistics industry

Page 30: China logistics industry  trends  investment opportunities_2011

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Section Two- State of China’s Logistics - Challenges & Future

Growth

� State of China’s Logistic Market � Market Characteristics � Understanding the Costs and Challenges � Industry Trends and Drivers � Future Market Potential

� Laying China’s Logistic Infrastructure � Current and Future Transportation Infrastructure � Logistic Hub, City and Passage Development � Chinese Government’s Support for Industry

� Leading Logistic Players in the Market � Leading Domestic & Foreign Players � Recent Business & M&A

Page 31: China logistics industry  trends  investment opportunities_2011

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Leading Logistics Enterprises..

Performance of Domestic Logistic Business for 2009

Revenues of Domestic Enterprises

Low profitability opens partnership and profit improvement opportunities

Profitability in 2009

Source: NDRC and Nankai University

Average profit margins of domestic

enterprises was 6% in 2010 down by

7.1% yoy

Page 32: China logistics industry  trends  investment opportunities_2011

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Leading Logistics Enterprises..

Foreign Logistic Enterprises Continue to Expand

Foreign enterprises seek to enter China also opens partnership opportunities

Market share of foreign logistic players still small but growing especially in the land freight

and air express freight segments

1. Fedex Asia-Pacific delivery center in Guangzhou Baiyun Airport

commenced operations in 2009- largest outside the US.

2. UPS relocated its intra-Asia hub from Clarke in Philippines to Shenzhen in

2010

3. DHL entered agreement with China Merchants Maritime Logistics in June

2010 to establish a global distribution center in Qinghai, Shenzhen

4. TNT established and invest EUR 170M in a wholly-owned road

transportation subsidiary in Hangzhou

5. In 2010 Japan’s largest logistic co. Yamato Holdings will setup cold-chain

land transport company in YRD with aim to reach 30 bn yen in 5 years

Page 33: China logistics industry  trends  investment opportunities_2011

Logistics Real Estate Developers:

- Government Ind/Log Parks, Local and Central SOEs.

- Private Co.: GLP (Prologis), AMB, Goodman, Ascendas, Mapletree Log. etc.

- Funds: A-Reit, ING Real Estate, Cache (ARA-CWT), PingAn,

Equity Int’l, China Inv Corp, Canadian Pension Fund etc.

33

Portfolios of Key Private Developers : (sqm by 2009) (Lease rates) 2010/11 New Devt. On hand & under construction

-

44000

150,000

270,000

300,000

850,000

- 96,000

40,000 82,000

- 220,000

60,000

170,000

1000,000

2,800,000

300,000

500,000

1,850,000 5,100,000

Leading Logistic RE Players..

Gaining Interest from Foreign RE Developers and Funds

Page 34: China logistics industry  trends  investment opportunities_2011

Recent New Business Starts..

� Large sports retailers: eg. Nike & Adidas.

� E-commerce: eg Alibaba, DangDang, Amazon.

� Retailers: eg. Carrefour, Tesco, Watson etc.

� Automobile & Car components: eg. Benz, BMW; GiTi, Faurecia.

� Food Industry: eg. Havi LC (McDonald) vs YLC (Yum! KFC)

� Cold chain logistics: eg. Americold, China Merchant Log, PFS.

� Others: Medical Pharma, Chemical logistics. eg. CWT, Kerry Log.

SERVICE PROVIDERS:

� 3PLs: moving from freights (DHL, Fedex, UPS) to Contract Logistics:

eg. APL- Hanes, Legend; YCH- Dell; Schenker- BMW.

� 3PLs-Shippers: eg. CEVA, Maersk, K+N, Samudera.

� SCM / BPO: eg. Banks- CitiBank, DEM/OEM- Hi-P, Eternal Asia.

Market Developments focused on Specialist Sectors

Knowing the Market Needs and Trends..to identify opportunities

Retail and consumer brand enterprises have been aggressively expanding and

building logistic capabilities- in-house and through 3PL partnerships; Automotive

logistic has also been a sector targeted by foreign enterprises

Page 35: China logistics industry  trends  investment opportunities_2011

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Recent Market M&A..

M&A Driven by Foreign Logistic companies….

World Class centres needed to support world class players’ logistics needs

Page 36: China logistics industry  trends  investment opportunities_2011

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Section Two- Identifying Business Opportunities in China

� Scoping of Opportunities � Screening Attractive Market Segments � Case Examples

Page 37: China logistics industry  trends  investment opportunities_2011

Scoping of Opportunities…

Identify Possible Market Segment Opportunity

Screen Potential of Market Landscape & Competitiveness; Analyse

Opportunity Transportation Mode vs Industry Segment

Road/

Rail

Freight

Air

Freight

Air

Express

Intl

Freight

Remark

Non-Food

Retail

Logistics

Vol + Margins

(Luxury gds –

strong Margins

Import

Pharma

Logistics

Domestic Market

only

Domestic Market

only Gd. Margins

Hi-tech/Auto

Logistics

Efficient SCM

required; Export

Food + Agro

Logistics

Domestic Market

only

Domestic Market

only Niche Cold Chain

logistics – Gd

Margins

Large Mkt

Med. Mkt

Small. Mkt

Retail & Hi-Tech/Auto Logistics Looks like good opportunities

Source: Various, Internal Analysis

Page 38: China logistics industry  trends  investment opportunities_2011

Scoping of Opportunities…

Identify Possible Market Segment Opportunity

Screen Potential of Market Landscape & Competitiveness; Analyse

Opportunity Transportation Mode vs Logistic Segment

Non-Food

Retail Logistics

Pharma

Logistics

Hi-tech/Auto

Logistics

Agro-Food

Logistics

Remark

Transportation

Outsourcing

trend

Distribution

Outsourcing

trend

Warehousing

Outsourcing

trend

Packaging &

Processing

Logistic IT &

Mgt Systems

Future demand

Large Mkt

Med. Mkt

Small. Mkt

Transportation, distribution & warehousing current hot Sectors

Source: Various, Internal Analysis

Page 39: China logistics industry  trends  investment opportunities_2011

Scoping of Opportunities..

Identify Possible Market Segment Opportunity

Screen Potential of Market Landscape & Competitiveness; Screening

Opportunity by Transportation Mode vs Location

Road/Rail

Freight

River

Freight

Air

Freight/Exp

Intl Remark

Western

Chengdu

Chongqing

Mega-hub

Central

Wuhan

Eastern

Shanghai

Northeast

Bohai-Tianjin

Southern

GZ-SZ

Larger Opportunities in emerging logistic hubs

Page 40: China logistics industry  trends  investment opportunities_2011

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Case Examples- Logistic Function

Overview of Warehousing Investments…

Recent continued investments continue into warehousing sector

As land &labor costs increase in the coastal cities, warehousing expansion continues

in 2nd / 3rd tier cities with need for better, quicker and more accurate deliveries

demanded by customers- hence opportunity for foreign investments

Source: Tomkins International Survey 2009

State of Chinese Warehouses Foreign Investments

• Current automation levels low

• Only 5% have good IT systems

• Existing warehouse in populated areas

which restricts trucking

• Foreign investments concentrated inBeijing,

Shanghai and Guangzhou hubs

• Warehousing focus for retail, apparel, auto,

pharma, electronics and tobacco sectors

Page 41: China logistics industry  trends  investment opportunities_2011

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Case Examples- Segment Investment

Recent New Business/Investments by Segments…

Non-Food

Retail

Logistics

Pharma

Logistics

Hi-Tech/Auto

Logistics

Food + Agro

Logistics

Invests U$1.2bn

in logistics Asia Distribution

Center

Italian fashion retail

Invests to open

Retail + warehouse

in TJ

Zhejiang

International invests

US$15M in Pharma

logistic center

Nhwa Pharma

invests US$18M in

Xuzhou Logistic

Center

Invests U$200M

In Suzhou to cater

for manufacturing

& supermart retail

RMB680M

Distribution Centre

in Chongqing

Metro Hypermart JV with

Shuanghui for delivery of all

frozen products

Substantial Investments seen into Auto/Consumer/Retail Segments

Active investments into building logistic infrastructure evident especially

from foreign logistic-focused RE players..

Source: Various, Internal Analysis

Page 42: China logistics industry  trends  investment opportunities_2011

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Case Examples – Location Investments

New Inland Hubs away from the Coast

Pop. GDP Transport

Nodes Economic

Drivers

Competitive

Edge

Wuhan

(Central)

8.9M RMB

456bn

• 4th Aviation

Hub

• Road/Rail hub

• Largest inland

River port

• Hi-tech

• Biotech

• Auto- Honda, PSA

• Logistic – TNT,

DHL

• Large pool U grads

• Strong IT foundation

• Rel. low land/labour costs

• Strategic centre of China’s

transport network

Wuhan is identified as the Central Logistic and Transportation hub and

provincial capital of Hubei province

Wuhan’s 1+8 Cluster of surrounding

cities offers multiple re-development

opportunities

Source: Chinese Govt. Sources

Page 43: China logistics industry  trends  investment opportunities_2011

43

Case Examples – Location Investments

New Inland Hubs away from the Coast

Pop. GDP Transport

Nodes Economic

Drivers

Competitive

Edge

Chengdu

(Southwest)

11.4M RMB

450bn

• Aviation Hub

• Asia’’s largest

rail container

hub

• Largest rail

network

• Hi-tech and IT

• BPO hub

• Biotech

• Food processing

• Logistic – TNT,

DHL

• Large pool U grads

• Strong IT foundation

• Rel. low land/labour costs

• Strategic centre of China’s

transport network

Chengdu will become China’s Southwest logistic hubs to drive economic

development further inland

Emerging Hubs appear to offer broader investment opportunities

Source: Chinese Govt Sources