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A New Tonic for Beijing-HK Logistics

The Tenth Beijing Hong Kong Economic Cooperation Symposium will be held in Hong Kong in November. This symposium’s theme will focus on the actual state of Beijing’s preparations for the 2008 Olympic Games.

In association with the symposium, the Beijing–Hong Kong Logistics Cooperation Symposium will open at 2:30 p.m. on November 16.

Beijing and Hong Kong begin their cooperation on logistics several years ago. One of the biggest beneficiaries of this cooperation is Kerry EAS Logistics, a subsidiary of the Kerry Logistics Network, Kerry Properties Limited and the Kuok Group of Hong Kong, which is a market leader in China and known worldwide. As with Beijing’s Kerry Centre, Kerry EAS Logistics is becoming a more important part of the lives of people in Beijing. Kerry Logistics began engaging with Beijing Enterprises Investment Limited to cooperate in Beijing’s logistics market on November 4, 2000, with an estimated US$50 million investment and with each party taking a 50 percent share. On April 4, 2001, Kerry Jingtai Logistics, a joint venture of Kerry Logistics and Beijing Enterprises Investment Limited, was set up to provide logistics services for the North China Region. Kerry Jingtai offered world-class comprehensive logistics services relying on its logistics and marketing networks that span the Asia-Pacific Region. It is committed to developing its business, with Beijing as its centre, radiating to the whole country and the Asia-Pacific Area. In 2005, Beijing Kerry EAS was cited as a five-star logistical company in China. As of 2006, Hong Kong-owned logistics companies accounted for 44.4 percent of Beijing foreign ownership logistics companies, with contracted foreign investment of US$360 million, accounting for 39.9 percent of Beijing foreign capital. About 1.5 billion yuan (US$200 million) of those funds, 24.3 percent of the total, have been used.

Hong Kong is a provider of third-party logistical services. Hong Kong logistics companies lay great stress on the construction of information systems and often develop their own software or hire professional software companies to design software strictly related to their business management systems. This modern management-based technology is convenient and efficient for clients and partners; its value is seen in the profits it helps produce.

Kerry’s successful management system is evident in its selection of sites for distribution centres, in its delivery of goods and in every aspect of its business operation, even in its selection of transport vehicles. Most Hong Kong logistics companies have their own vehicles and drivers, but will hire local transport if they are not able to accomplish a task themselves while doing international logistics business. The expansion of services provided is another common characteristic of the Hong Kong logistics business, which brings more profit to the prosperous industry.

With the rapid development of its economy, Beijing has a need to develop professional, third-party logistics service industries, and great progress has been reported in this regard in recent years, especially with the city’s infrastructural development and its overall spatial development. Large quantities of logistics workers are a strong point for Beijing. However, its rapidly developing economy and the 2008 Olympics is stimulating a growing need for modern logistics services and more skilled, high quality workers are needed. Beijing and Hong Kong will mutually benefit from cooperation in these business areas; hence a business opportunity for Hong Kong businesses has emerged. At the same time Beijing must improve its scientific management, develop professional logistics talents and build third-party logistics companies.  

The Eighth Beijing–Hong Kong Economic Cooperation Symposium & Olympic Economy Market Promotion Conference will be fruitful for logistics industries in both cities. The Beijing Southwest Logistics Centre, which began its cooperation with Hong Kong logistics companies in international book copyrights, scientific and technological construction, and in 2008 Olympics-related flower growing and preserving, is a big winner in this regard. Another winner is the Beijing Airport Logistics Base, which is working with the Hong Kong Air Transportation Centre and Trade Logistics Centre and other large logistics companies in Hong Kong. In addition, the Beijing Logistics Association has suggested additional bilateral cooperation with Hong Kong Logistics Association at the symposium.

With the opening of the 10th Beijing Hong Kong Economic Cooperation Symposium, Beijing and Hong Kong will take their cooperation to a higher level. This symposium will focus on ongoing Beijing Olympic and Paralympic construction. Construction needs involve several aspects, ranging from stadiums and traffic management to the environment and technology. The logistical needs are great and wider than Beijing can provide alone. Olympic pre-competition construction is going well.

According to Wang Guofeng, president of Beijing Logistics Association, the predicted value of logistical operations could amount to as much as 41.7 billion yuan (US$5.2 billion), with 96.5 percent of the total concentrated in the pre-competition period. About 98.2 percent of spending on logistics will be ordered by the Beijing Municipal Government, which should be a focus of future logistical thinking with regard to Beijing Hong Kong economic cooperation. With respect to indirect logistics requirements, dining and retail services will account for 490 million yuan (US$61.25 million), and the waste disposal directly related to the Olympics will provide 1.08 billion business opportunities, 88.9 percent of which will be in the disposal of solid wastes produced by Olympic audiences and tourists in the city. During the 2008 Olympic Games, 40 billion yuan (US$5 billion) will be spent on logistics, with 75,000 tons of cargo transported. All of these service requirements will require the services of high-standard and highly efficient logistics enterprises, including those of Hong Kong.

Since the signing of the Closer Economic Partnership Arrangement (CEPA) in 2003, Beijing and Hong Kong have strengthened their logistical communication and cooperation in the two areas. With the opening of the Tenth Beijing Hong Kong Economic Cooperation Symposium, Beijing and Hong Kong will surely to strive to expand their cooperation while providing modern logistics services to the Beijing Olympic Games.