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Yangtze River Infrastructure Development

www.yangtzeriverports.com. Yangtze River Infrastructure Development. Yangtze River Overview. An Emerging Economic Corridor. We believe a river system is more than the sum of it’s ports. YR as Regional Sections. Yangtze River. Lower Reaches Nanjing to Shanghai: 402 km. Middle Reaches

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Yangtze River Infrastructure Development

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  1. www.yangtzeriverports.com Yangtze River Infrastructure Development Jon Monroe Consulting

  2. Jon Monroe Consulting

  3. Yangtze River Overview An Emerging Economic Corridor Jon Monroe Consulting

  4. We believe a river system is more than the sum of it’s ports. Jon Monroe Consulting

  5. YR as Regional Sections Jon Monroe Consulting

  6. Yangtze River Lower Reaches Nanjing to Shanghai: 402 km Middle Reaches Yichang to Nanjing: 1550 Kilometers Upper Reaches Yibin to Yichang 850 Kilometers Jon Monroe Consulting

  7. YR as a Single Entity • Five Year Planning Mechanisms • Port Infrastructure • Road/Rail/Bridge Infrastructure • Hinterland Development • Provincial and City Plans • Urbanization Planning Jon Monroe Consulting

  8. Yangtze River Basin • Seven Provinces: 424.6 mil • Two Municipalities: 48.0 mil Anhui Pop: 60.7 mil GDP: 735 billion RMB City: Hefei Port: Tongling, Ma’anshan Jiangsu Pop: 71.1 mil GDP: 2.56 trillion RMB City: Nanjing Port: Nanjing, Lianyungang Hubei Pop: 58.25 mil GDP: 915 billion RMB City: Wuhan Port: Wuhan, Yichang Sichuan Pop: 84.3 Mil GDP:1.05 trillion RMB City: Chengdu Port: Luzhou, Yibin Shanghai Pop: 17 mil GDP: 1.2 trillion RMB City: Municipality Port: Shanghai Zhejiang Pop: 43.43 mil GDP:1.86 trillion RMB City: Hangzhou Port: Ningbo Chongqing Pop: 30.9 mil GDP: 411 billion RMB City: Municipality Port: Chongqing Hunan Pop: 63.42 mil GDP: 914.5 billion RMB City: Changsha Port:Yueyang Jiangxi Pop: 43.4 mil GDP:547 billion RMB City: Nanchang Port:Jiujiang

  9. Strategic Yangtze River Cities Note: Though the lower reaches runs through the Yangtze River Delta, each is covered separately. The dynamic of the coastal ports is distinct from the activity of the river ports in the lower reaches Jon Monroe Consulting

  10. Key YR Economic Regions Jon Monroe Consulting

  11. Yangtze River Lower Reaches Nanjing to Shanghai: 402 km Middle Reaches Yichang to Nanjing: 1550 Kilometers Upper Reaches Yibin to Yichang 850 Kilometers Jon Monroe Consulting

  12. Top 10 Yangtze River Ports Jon Monroe Consulting 12

  13. Yangtze River 12th 5 Year Plan Summary • Gov’t will spend rmb 36bil/US$ 5.6bil on Yangtze River under 12th 5 Year Plan (vsrmb 13.2 bill in 11th plan) • Devlopment of YR Port Clusters • Shift to Regional Cooperation • More investment in Hydroelectric power on river • Continue Dredging and standardization of container vessels • Expand Hinterlands, especially rail Jon Monroe Consulting

  14. YR Container Port Projections By 2020, YR & Delta design capacity will be greater than all of China throughput in 2009 2020 projections based upon current port plans for new construction & expansion Jon Monroe Consulting

  15. Upper Reaches “Go West” Jon Monroe Consulting

  16. Upper Reaches Fact Sheet • Includes the area from Yibin to Yichang • Chongqing can be reached by vessels of 1500 DWT • Expect the draft to increase to allow 2500 DWT vessels to reach Chongqing • Most cities on a hill due to rising waters of River • Major market in the Chongqing-Chengdu corridor reaching more than 100 million people • Transit to Shanghai by barge is 7-9 days • Increased investment in 12th 5 Year Plan Jon Monroe Consulting

  17. Yangtze River: Upper Reaches 850 Kilometers Luzhou to Yichang Jon Monroe Consulting

  18. Upper Reaches Cities Chengdu 260km Chongqing 299km 263km 650km Yibin 177km 3 Gorges Dam Yichang 123km Luzhou Jon Monroe Consulting 18

  19. Upper Reaches: Key River Ports Source: Respective Port Authorities Jon Monroe Consulting

  20. Upper Reaches: Infrastructure Challenges Source: Jon Monroe Consulting Jon Monroe Consulting

  21. Source: Jon Monroe Consulting 6 to 8 moves per hour vs 32+ Jon Monroe Consulting

  22. Source: Jon Monroe Consulting Jon Monroe Consulting

  23. SIPG Chongqing Chayuan Terminal Source: Jon Monroe Consulting Jon Monroe Consulting

  24. Upper Reaches Projections • Companies are relocating westward to the upper reaches of the Yangtze River; Examples: Foxconn, Hewlett Packard, Apple Computer, Amazon, APL and Maersk • Upper reaches container traffic is expected to grow ten times 2009 throughput by 2020 • Three port groups driving this growth; Sichuan Port Group, Chongqing Port Group and Shanghai International Port Group • Financial crisis will expedite this movement as companies focus on cost • Most upper reaches container movement is direct to Shanghai via either Waogaoqiao or Yangshan Ports • Upper reaches infrastructure is being rapidly constructed to support port; rail intermodal movement might not be for some time • Chongqing Government will subsidize logistics companies who move into one of the development zones Jon Monroe Consulting

  25. Middle Reaches “Booming Central China” Jon Monroe Consulting

  26. Middle Reaches Fact Sheet • Middle Reaches cover 1,550 km from Yichang to Nanjing • Key cities include Wuhan,Yichang, Jiujiang and Wuhu • Wuhan and Jiujiang have access to the Beijing-Guangzhou Railway • Access to Yangtze River and Railway makes these cities ideal for domestic distribution in China • Yichang will become hub and gateway to/from Sichuan as well as center of power industry • Transit to Shanghai by barge is 3 to 5 days • Middle Reaches Ports grew faster than Upper or Lower Reaches in 2009 • Eleven River Ports are located in Middle Reaches • By 2015, the Middle Reaches capacity are expected to grow five time Jon Monroe Consulting

  27. Middle Reaches Yichang to Nanjing: 1,550 km Jon Monroe Consulting

  28. Middle Reaches Key Cities Hefei Wuhu 142km 469km To Nanjing 415km 3 Gorges Dam Wuhan 300km 240km Jiujiang 44km Yichang 133km 376km Yangtze River Nanchang Jon Monroe Consulting 28

  29. Middle Reaches: Key River Ports Source: Respective Port Authorities Jon Monroe Consulting

  30. Wuhan Port Yangsi Terminal Yangluo Terminal Source: Jon Monroe Consulting Jon Monroe Consulting

  31. Jon Monroe Consulting

  32. Middle Reaches Projections • Middle Reaches represents the longest stretch of the river, winding through four provinces; Hubei, Hunan, Jiangxi & Anhui • This includes eleven port cities; Hubei (4), Hunan (1), Jiangxi (1) and Anhui (5) • Middle Reaches is expected to grow five times 2009 by 2015, a CAGR of 32.75% • Four port cities are instrumental to Middle Reaches growth; Yichang, Wuhan, Jiujiang and Wuhu • Two cities are the best positioned strategically to develop the Middle Reaches and Central China; Yichang and Wuhan • Wuhan will dominate Middle Reaches and the rapidly developing supporting rail and road infrastructure will support make Wuhan a major distribution hub for Central China • Expect growth in the middle reaches during the 12th Five Year Plan (2011 – 2015) Jon Monroe Consulting

  33. Lower Reaches “Shuttle for Eastern Manufacturing” Jon Monroe Consulting

  34. Lower Reaches Fact Sheet • Lower reaches cover 402 km from Nanjing to Shanghai • The lower reaches has the highest density of river ports with ten ports located on the YR • The lower reaches ports represents 78% of the container throughput of the Yangtze River • In 2008, Taicang Terminal passed Nanjing to become the largest container port on the Yangtze River and lower reaches • The majority of container throughput in most lower reaches ports moves direct to Shanghai terminals supporting Shanghai as a shipping center • Nanjing, Nantong and Taicang have international direct calls to Hong Kong, Taiwan, Japan, Korea and SE Asia • Lower reaches container capacity is expected to triple 2009 throughput by 2015 Jon Monroe Consulting

  35. Lower Reaches Nanjing to Shanghai: 402 km Jon Monroe Consulting

  36. Nantong 52km Nanjing 192km Zhangjiagang 87km From Wuhu 90km To Shanghai Taicang 82km Yangtze River Suzhou Lower Reaches Key Cities Jon Monroe Consulting

  37. Lower Reaches: Key River Ports Source: Respective Port Authorities Jon Monroe Consulting

  38. Taicang Terminal Jon Monroe Consulting

  39. Lower Reaches Projections - 1 • The lower reaches of the Yangtze River runs through a single province, Jiangsu, encompassing ten river ports • The top four ports along the Yangtze River, by TEU throughput, are Taicang, Nanjing, Zhangjiagang and Jiangyin, all located in the lower reaches • The lower reaches container activity accounted for 78% of total Yangtze River container activity • Suzhou Port as a combined port group, is the largest container and general cargo port along the Yangtze River • In 2008, Taicang surpassed Nanjing to become the largest container port along the Yangtze River Jon Monroe Consulting

  40. Lower Reaches Projections - 2 • In 2009, Zhangjiagang surpassed Nantong to become the largest general cargo port along the Yangtze River • Most of the manufacturing activity in the lower reaches has been contained in South Jiangsu • As manufacturing activity moves north in Jiangsu Province, Nantong becomes a more viable port, putting it in a more strategic position relative to the other Yangtze River ports • The close proximity of the ten lower reaches ports will create a competitive environment due to the overlapping hinterlands • Logistics facilities are moving from Shanghai to lower reaches cities like Nanjing, Suzhou and Kunshan Jon Monroe Consulting

  41. Yangtze River Delta “An economic engine….. & Gateway to the World” Jon Monroe Consulting

  42. Yangtze River Delta Fact Sheet • The YRD accounts for 21.4% of China’s GDP with only 11.1% of the population and 2.2% of land area • The YRD embraces Shanghai Municipality and 15 cities of Zhejiang and Jiangsu Provinces • YRD cities are promoting regional integration for growth and economic activity • Most of the manufacturing sector along the Yangtze River has settled in this area • Five Metro Circles have been developed to drive YRD cities integration: Shanghai, SuXiChang, Nanjing, Xuzhou and Hangzhou • Rail, road and bridge infrastructure has been completed to support this integration including four major bridges; Donghai, SuTong, Hangzhou Bay and Zhoushan Cross Sea Bridge • Two largest Yangtze River ports, Taicang and Zhangjiagang; and two largest coastal ports in China, Shanghai and Ningbo are all located in YRD Jon Monroe Consulting

  43. Yangtze River Delta Economic Indicators Note: GDP stated in RMB and FDI stated in USD Source: China National Statistics Bureau Jon Monroe Consulting 43

  44. Jon Monroe Consulting Jon Monroe Consulting

  45. Yangtze River Delta: Key Coastal Ports Jon Monroe Consulting

  46. To Shandong Province Lianyungang Xuzhou Yancheng Huai’an Yellow Sea Suqian Yangzhou Taizhou Nanjing Nantong Changzhou Zhenjiang Wuxi To Anhui Province Suzhou Shanghai Taihu Lake Huzhou East China Sea Jiaxing Hangzhou Bay Bridge Hangzhou To Jiangxi Province Jinhua Zhoushan Shaoxing Quzhou Ningbo Taizhou Lishui Wenzhou Yangtze River + 16 YRD Cities JingHang Canal + + 25 YRD Cities YRD Coastal Jon Monroe Consulting

  47. Yangtze River Corridor • Western Migration via Yangtze River • Lower Costs • Plentiful Local Labor • Land-Investment Incentives • 300+ million people • Emerging City Cluster • Chongqing-Sichuan • 115 million people • GDP 1.2 Tril yuan • Emerging City Cluster • Middle Reaches Yangtze River • 58 million people • GDP 1 Tril yuan • Major City Cluster • Yangtze River Delta • 130+ million people • GDP 3.9 Tril yuan Jon Monroe Consulting

  48. Where Are We? • Mfg costs going up in YRD • Focusing on cooperative development among YRD Cities • Approximately 70% of the traffic along Yangtze River moves within YRD • Expect more cooperation between YRD cities and cities in the upper and middle reaches of Yangtze River • More companies will locate in YRD as a base to access central and Western China • Expect larger vessels to call Nanjing and move direct to foreign ports Jon Monroe Consulting

  49. Summary Jon Monroe Consulting

  50. Yangtze River Summary • Yangtze River may well become the world’s largest economic corridor by 2020 • China’s central planning will encourage western movement and cooperation as well as competition among city’s and ports • The river can be regionalized into four sections: upper, middle, lower and delta & coastal • Rapid urbanization and an improved infrastructure will drive this process • Port development capacity may well exceed demand • By 2020, China will have the most sophisticated manufacturing and transportation infrastructure in the world connecting ports and cities via rapid rail, road and air networks. • This will be supported by a shift from dependence on exports to a more balanced trade flow and a strong domestic economy Jon Monroe Consulting

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