China sets up state-owned logistics group to improve competitiveness

09 Dec '21

2 min read

Pic: Dreamstime.com

China recently launched a new state-owned logistics entity—China Logistics Group—by combining the logistics assets of four companies, already runs logistics hubs in 30 Chinese provinces as well as five continents. It aims to be a global supply chain organiser and bolster supply chain security and stability amid disruptions and uncertainties during the pandemic.

China Logistics Group operates 3 million vehicles. It has property rights on 24.26 million square meters of land, owns 120 designated railway lines, and has 42 futures delivery warehouses.

The move follows China’s decision to help stabilise global supply chains at the recently concluded Group of 20 meeting and amid a logjam in the US that has grabbed headlines.

Hao Peng, head of China's State-owned Assets Supervision and Administration Commission, said at the founding ceremony that the company should strive to ensure smooth flows of production factors under the dual circulation development paradigm and forge a secure, reliable and highly efficient modern logistics system, according to reports in official Chinese media outlets.

The new entity was formed by merging China Railway Materials, China National Materials Storage and Transportation Group, Huamao International Freight Limited Company Shenzhen Branch, China Logistics and China National Packaging Corp.

It will include as strategic investors the parent firms of China Eastern Airlines, COSCO Shipping and China Merchants Group, which will respectively hold shares of 10 per cent, 7.3 per cent and 4.9 per cent.

In the first six months of 2021, the value of China's social logistics reached 150.9 trillion yuan ($23.24 trillion), up by 15.7 per cent year-on-year, outperforming the pre-pandemic level, according to a report by the China Federation of Logistics and Purchasing in August.

Fibre2Fashion News Desk (DS)

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