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Reorganization of shipping central enterprises. Why did Shanghai and Guangzhou win Tianjin and Dalian?


Jun 18 2016

Guide: Two days ago, news came that the first round of restructuring of China Ocean Shipping and China Shipping, the two giants of the Chinese shipping industry, was settled.
In the past two days, there was news that the first round of restructuring of China Ocean Shipping and China Shipping, the two giants of the Chinese shipping industry, was settled. This round of reorganization focuses on integrating the three major sectors of container transportation, oil and gas transportation, and bulk transportation.

For the central government, this is an inevitable move of the Chinese economy to go global and the “Belt and Road” national strategy. For local governments, the reorganization of central SOEs has also brought new opportunities for local reshuffle. So, who are the major business segments after the reorganization?

According to reports, the registered address of the reorganized COSCO Shipping (Headquarters) is the Shanghai Free Trade Zone. Among the three major segments, the headquarters of the container and oil transportation business fell to Shanghai, while the headquarters of the bulk cargo business was picked up by Guangzhou.

This report conveys at least the following information:

Central state-owned enterprises move, Shanghai and Shenzhen may be the biggest winners

It is not just a slogan to deconstruct the functions of Beijing's non-capital core areas and the relocation of the headquarters of central enterprises from Beijing.

Before the reorganization, China Ocean Shipping was headquartered in Beijing, China Ocean Shipping was headquartered in Shanghai, and the new headquarters was selected in Shanghai after the reorganization, which proves Shanghai's advantage in taking over the headquarters of central enterprises. Beijing has no ports, and Shanghai is China's largest shipping center city. Undertaking China's largest shipping company is also a response to market laws.

In addition to China Ocean Shipping, another central enterprise giant, China Electronics and Information Industry Group Co., Ltd., is said to also move its headquarters to Shenzhen. Shenzhen is the most developed city in China's electronic information industry. China Electronics' relocation to Shenzhen can also be seen as a response to the laws of the market.

In addition to Beijing, Shanghai and Shenzhen are also national economic centers. They have great advantages in infrastructure, financing channels, preferential policies, talent reserves, and internationalization. It is reasonable to believe that these two cities will be the biggest winners in moving central enterprises.

Why did Shanghai and Guangzhou win Tianjin and Dalian?

Before the reorganization, COSCO's bulk cargo base was in Tianjin, the container business was headquartered in Shanghai, its oil shipping business was headquartered in Dalian, and the special shipping business was located in Guangzhou. For China Shipping, the registered headquarters and container business are located in Shanghai, while the bulk cargo business is located in Guangzhou. So after the reorganization, Shanghai and Guangzhou are the biggest winners, while Tianjin and Dalian can't help but look a little lost.

Previous media reports said that Tianjin and Guangzhou, both port cities, competed fiercely when bidding for freight headquarters. Tianjin has always belonged to COSCO's “base camp”, with large dry bulk ports and complete terminal facilities. In addition, Tianjin has been very active in attracting investment with favorable conditions. I hope that these companies can settle in the Tianjin Economic and Technological Development Zone.

This is why Tianjin has always been more optimistic. However, the report also revealed that Guangzhou ’s strategy is more aggressive. “They just told COSCO that Guangzhou would meet any conditions provided by other cities.” There is no doubt that in this round of competition for the headquarters of central enterprises, Guangzhou has shown a rare That inevitable determination and execution.

Of course, some insiders have also analyzed that the explosion in Tianjin Binhai New Area last year may have affected the bid to a certain extent, and the reorganized new headquarters may have some doubts about Tianjin's management level in public safety.

The focus of China's shipping business is moving south?

It is worth noting that China's shipping business is basically monopolized by four companies, namely China Ocean Shipping, China Shipping, China Merchants, and Sinotrans. The former two were integrated into COSCO Shipping, with its headquarters in Shanghai, and Sinotrans was integrated by China Merchants, with its headquarters in Hong Kong.

This means that there are no first-tier companies in the shipping industry north of the Yangtze River. The business of shipping central enterprises is not only a fleet, but also a large-scale port business. For example, the two giants of COSCO and China Merchants have basically invested in the investment and operation of all domestic port cities. Therefore, the southward relocation of shipping central enterprises is also a positive for the operation of southern port cities.

This may send an important signal that is the overall southward shift of the center of gravity of China's shipping business.

In the past ten years or so, relying on the boom of the energy industry and heavy industry, the throughput of northern port cities has grown strongly. However, the situation has changed in the past two years. The traditional manufacturing industry ’s decline and overcapacity have generally occurred in northern cities. The proportion of energy industry and traditional manufacturing industry is relatively low, and the proportion of light industry and advanced manufacturing industry is relatively high. To a certain extent, the pain of reducing production capacity and adjusting structure is avoided.

This may also be an important consideration for shipping central enterprises to move south.

What kind of profit can Guangzhou get if it gets a central enterprise settled?

Some people may say that after the restructuring, COSCO Shipping will focus on container shipping and oil shipping, with low added value in bulk shipping, and face the predicament of the sluggish global freight business. In the past two years, the growth of freight volume in major domestic port cities has been sluggish, but container shipments have maintained a high growth trend. In addition, COSCO and China Shipping are the two famous owners of losses.

However, the reorganized bulk shipping business ranks first in the world in terms of capacity. Guangzhou can still have such a top shipping company in the world, which is still very congratulatory. For Guangzhou, this world ’s largest bulk cargo transportation headquarters will not only bring considerable tax and GDP data to Guangzhou, but may also drive a huge industrial chain, such as shipbuilding, ship maintenance, and financial leasing. industry.

Moreover, the losses of central SOEs are not subsidized by local governments. More importantly, the presence of state-owned enterprises is a manifestation of the right to speak, which is a foundation for Guangzhou to build an international shipping center.

Of course, compared to Guangzhou, Shanghai will definitely get more benefits.

Apart from COSCO Shipping, which other central enterprises have Guangzhou settled in?

Probably since last year, Guangzhou ’s performance in the headquarters economy has been overwhelmed by Shenzhen, but if you read more newspapers and less rumors, you should be able to realize that Guangzhou also has a lot of achievements in attracting headquarters companies.

Here is a brief list of the information disclosed in the newspaper:

In addition to the freight headquarters of COSCO Shipping, Guangzhou Nansha New District also introduced projects such as CCCC International Headquarters, China Railway Construction South Headquarters, and Sinochem Group Regional Headquarters. L'Oreal France's production and R & D base has been put into operation.

In addition to state-owned enterprises, Guangzhou also built a so-called "Pazhou E-commerce Headquarters" last year, which attracted Internet giants such as Ali, Tencent and Vipshop. Not only that, Guangzhou also attracted Wanda Sports Global Headquarters and DG South Headquarters. In the first two months, it also successfully joined hands with American technology giant Cisco.

Read more newspapers, Guangzhou's efforts are still there!

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