The document analyzes trade data from Chinese inland and coastal regions: 1) Exports from major inland regions like Wuhan and Chongqing show above average growth compared to coastal regions, with automotive and high-tech exports growing rapidly. 2) Inland regions have a more balanced trade ratio between imports and exports compared to coastal regions, resulting in less equipment shortages. 3) The share of raw material exports is decreasing for inland regions, indicating increased manufacturing and production activity inland.

1. Oct 2010
Analysis of Chinese inland regions
More insight, better decisions….
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2. The interest in Chinese inland provinces in the media
Each part of the supply chain recognizes the potential of the Chinese inlands
“Shenzhen is reaching out to the interior for a larger proportion of its cargo”
“Nissan to Set up Electric-Car Production in Wuhan”
“NOL Group to Establish Global Service Centre in Chongqing Municipality, Western China “
“Special report: World's workshop heads to inland China“
“Ch in e se in lan d o p e n fo r b u sin e ss, w ith e v e ry in ce n tiv e ”
“Foxconn to build laptop manufacturing hub in Chongqing”
“APM Terminals sees great potential for growth in the central China logistics hub on the Yangtze river”
“China's rising wages push investors inland “
“Wuhan, China to be Base for Electric-Auto Output “
“Intel's move signals inland shift in China”
“Two-speed China: faster inland, slowing coast”
“P fizer look s in la n d for les s cos t ly t a len t p ool”
Source: various media channels
“Investment in China Migrates Inland”
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3. Comparing Chinese Coastal regions with the inlands
For the analysis we compared the trade data of the major gateway regions around sea ports
with gateway data at inland locations with high-class waterways
Coastal gateway regions
1 Guangzhou 9 Shenzhen
6
2 Ningbo 10 Hangzhou
3 Shantou 11 Gongbei
4 Qingdao 12 Shanghai
5 Xiamen 13 Huangpu
6 Tianjin 14 Zhanjiang
8
6
7 Fuzhou 15 Jiangmen
4
8 Dalian 16 Haikou
4
5 12
Inland gateway regions 1 10
9
1 Wuhan 6 Harbin 2 2
2 Chongqing 7 Nanning
3
10 7
3 Nanchang 8 Guiyang 8
4 Nanjing 9 Chengdu
7 5
5 Hefei 10 Changsha
13 3
14 9 1
15
11
16
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4. Export growth Chinese inland regions looks promising
Majority of the inland regions show above average China growth figures
Export growth in the last 12 months (Oct 2009 to Sep 2010) compared to the previous 12 months
Growth
(YoY)
40%
Coastal gateway regions
35% Inland gateway regions
30%
Total Chinese export
25% growth: 20.3%
20%
15%
10%
5%
0%
-5%
-10%
Source: Seabury’s Global Ocean Database
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5. Inland growth compared to coastal regions
Exports for inland regions show high volatility whereas imports show structural growth. This
despite the majority of the strong growing waste commodities remaining in coastal provinces
Monthly export growth (YoY) in last 18 months Regional imports first three quarters of the year
Growth Inland gateway regions Growth Coastal gateway regions
(YoY) (YoY)
Coastal gateway regions Inland gateway regions
60% 15%
50%
10%
40%
30% 5%
20%
0%
10% 2008 (Q1-Q3) 2009 (Q1-Q3) 2010 (Q1-Q3)
0%
-10%
Share of waste commodities on total imports (2009)
-20%
Coastal regions Inland regions
-30% Waste*
Waste* 26% commodities
-40% 47% commodities
53%
Sep 74%
2008 2009 2010 Other
commodities Other
commodities
Source: Seabury’s Global Ocean Database * = Waste commodities: waste paper, plastics and metal scrap
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6. Drivers behind growth for inland gateway regions
The share of raw material exports for the inland regions is decreasing, indicating an
increase of production / manufacturing activity in these regions
Commodity share for inland region exports Commodity share for coastal region exports
100% 100%
90% 90%
80% 11% 80%
16%
70% 70% 25% 29%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
2007* 2008* 2009* 2010* 2007* 2008* 2009* 2010*
Capital Equipment Fashion Goods High Tech Machinery (parts) Perishables
Chemicals Consumer goods Automotive Raw Materials
Source: Seabury’s Global Ocean Database * = for proper comparison we are comparing January to September for each year
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7. Trade imbalance at coastal regions and inland regions
Inland regions are more balanced than coastal regions resulting in less container shortages
or equipment repositioning
Regional containerized import and export share in 2009
100%
Export
75% 48% Share
69%
50%
Import
25% 52% Share
31%
0%
Source: Seabury’s Global Ocean Database
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8. Chongqing gateway region
Motor cycle exports remain the largest commodity. The impact of new high tech production
facilities can already be witnessed in trade data
Largest export commodities from Chongqing Fast growing export commodities from
region Chongqing region
TEU TEU
(x 1,000) +100% (x 1,000)
90 6 +55%
2008* 2008*
80
2009* 5 2009*
70 2010* 2010*
60 4
50 +148%
3
40 +37% 30%
30 2 +200%
+33% +52%
20 +73%
1
10
0 0
Source: Seabury’s Global Ocean Database * = for proper comparison we are comparing January to September for each year
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9. Wuhan gateway region
On average double digit export growth from Wuhan in the last 5 years. Especially
automotive and high tech are expected to grow fast in upcoming years
Yearly exports from Wuhan gateway region Fast growing export commodities in Wuhan
CAGR (’06 - ’10) of 10.9%
is much higher than total
Chinese export CAGR of 2008**
5.1% in same period TEU 2009**
TEU (x 1,000)
(x 1,000) 2010**
+255%
180 25 +16%
150 10.9%
20 +150%
+13%
120 +62%
15
90
10
60
5
30
0 0
2006 2007 2008 2009 2010*
* = last three months of 2010 is estimate based on Seabury analysis
** = for proper comparison we are comparing January to September for each year
Source: Seabury’s Global Ocean Database
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10. Contact details
For more information, please contact…
Mathijs Slangen
Senior Analyst
Seabury Cargo Advisory
E-mail: mslangen@seaburygroup.com
Cell: +31 6 1585 6951
Phone: +31 20 880 4224
Fax: +31 20 890 8620
Website: www.seaburygroup.com
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