How to Integrate Port Resources

By Xu Jianhua

Ningbo and Zhoushan port groups were just merged to form Ningbo-zhoushan Port Group Co.， Ltd. Then the establishment of Anhui port group was announced， integrating An Qing，Wu Hu， Ma Anshan port groups and becoming another port giant. It is reported that integrating Dalian，Yingkou and Dandong ports into Liao Ning Port Group is already on the agenda. It can be predicated that a new round of integration wave is coming.

Port resources integration can be divided into integration of port administrative resources and port operation resources.As regards the integration of administrative resources，under the condition of China’s low coastline management restriction force， the competition between different levels of Chinese government makes it dif fi cult to realize the orderly use of port natural resources through integration of port administrative resources across administrative regions. In addition， the integration of port administrative resources across administrative regions will also result in confusion of administrative order and overlap of administrative power.

There are lots of examples of port alliances in China，such as the three ports of Beibuwan， Hebei Port Group and Wuhan new Port. But most of them are the merge at capital level， not the integration at administrative level. Zhoushan Port is the most typical one. In fact，there is not an entity called "Ningbo-zhoushan Port Administration Bureau". It is rather putting together the output volume. Even the "Ningbo-Zhoushan Port Master Plan" is putting the chapters of two plans into one.Therefore， Ningbo-zhoushan Port is still at the stage of port alliance， it is still far away from the objective of"Ningbo-zhoushan port integration".

In fact， port alliance is different from port merge which is a big issue. If putting together the output volumes means the integration of two ports， then a large number of giant ports such as Shanghai-taicang port， Shenzhendongguan port and Qingdao-rizhao port will appear if two adjacent ports agree. It is not meaningful.

It is not recommended to integrate administrative resources across administrative regions since the function is limited and there would be many problems.However， the streamlining and integration of different port and shipping administrative departments could be considered to conduct well the administrative streamlining and power delegation to improve administrative ef fi ciency.

As regards the integration of port operation resources，since most ports have realized the separation of government functions and enterprise management， and most big port enterprises had gone public. Therefore，administrative orders are either not effective or costly in the fi eld of port operation resources integration.

Apart from the integration mode led by the government，there is also the pure business mode of port resource integration， such as the "Long River Strategy"of Shanggang group， the Beibuwan international business group consisted by Fangcheng port， Qinzhou port and Beihai port. Hebei port group consisted by Qinghuangdao port， Caofeidian port and Huangye port，as well as Xiamen container wharf.

By analyzing the process and effect of these modes of integration， the cost of the pure business integration is relatively high. According to statistical data from China Port Association， 20 ports which occupy more than 60%market share of port handling capacity made profit in 2014， and most of terminal properties under those port enterprises have gone public. Under the background of market economy， the cost is high to merge and purchase operation resources.

The successes of "Long River Strategy" and Beibuwan international port group are partly based on poor economic bene fi ts of those enterprises before integration，and government subsidies. It is relatively easy to realize business integration. But the stage achievements of these two cases cannot ensure the future tendency and performance in the future.

Due to regional monopoly of port natural resources，port groups held by SASAC depend heavily on local government. Benefit is made through monopoly. If two port groups are integrated into a Harbor Group in accordance with the administrative order of provincial government， the two local governments certainly will pursue the maximum of efficiency of their respective port capital. Therefore， such “aircraft carrier” Groups can not go far.