The central government's recent decision to construct a modern
logistics system to support the dual circulation development pattern
would guide infrastructure investment into high-efficiency
transportation including airports and high-speed railway development,
They said a modern and efficient logistics system will help provide
strong market dynamism for balancing supply and demand, industrial
upgrading, improving economic efficiency and fostering high-quality
development in the country.
Feng Tianjun, a professor at Fudan University's School of Management
in Shanghai, said it was of great significance for the meeting of the
Central Committee for Financial and Economic Affairs to make the
decision on developing the modern logistics system on Wednesday.
"Building a modern logistics system with enhanced cargo capacity on
high-speed railways and international flights will drive infrastructure
investment in airports and high-speed railways, as well as other
The decision came as the country faces a grim and complicated
economic situation both at home and abroad and is transitioning from a
phase of rapid development to a new stage of high-quality development.
"Logistics is a basic, strategic and guiding industry that supports
the development of the national economy," the National Development and
Reform Commission, China's top economic planner, said in a statement
last week. "We are in need of a well-developed logistics system to help
create a strong domestic market and build a modern economic system."
Wang Yong, a visiting professor at the KTH Royal Institute of
Technology in Stockholm, Sweden, said China has entered a crucial phase
in which the country needs to upgrade its logistics system.
"The modern logistics system is an important carrier connecting
consumers and producers, as well as a key part of China's domestic
market. And it also provides strong support to build a new model of
development in which the domestic economic network takes the primary
role, with the domestic and international economic networks
complementing each other.
"In the battle against the COVID-19 outbreak, China's logistics
system has withstood the test of pressure and time. However, problems
remain such as insufficient supply and the relatively low level of
development," he added.
Wang said more efforts are needed to expand the effective supply in
the logistics market, boost infrastructure development, promote
information application and big data development in the logistics field,
develop smart logistics and distribution, drive innovation in the
supply chain and improve standards and the regulatory system.
"Logistics is the precondition for distribution, and modern logistics
cannot make efficient deliveries without infrastructure such as
airports," said Feng at Fudan University.
According to Feng, airports are the fundamentals for high-efficiency
logistics, as "it is the sufficient number of airports and the strong
aviation network that have enabled FedEx to reach its scale to date".
China's leading logistics firms SF Express and YTO Express have
already recognized the significance of infrastructure, and made great
investment in air cargo distribution centers to gain a bigger share of
domestic and overseas markets.
The nation's first freight airport is being built by SF Express in
Ezhou, Hubei province. The logistics hub is expected to come into
operation by the end of 2021, according to Ren Hong, an official at the
National Development and Reform Commission.
Shanghai YTO Dragon Investment Development (Group) Co Ltd, the parent
company of YTO Express, is also planning to build an international
aviation logistics hub in Jiaxing, Zhejiang province. The hub, which
will involve a total investment of 6.61 billion yuan ($970 million), is
expected to have an annual freight handling capacity of 2.4 million tons
Eastern Air Logistics Co, the freight unit of China Eastern Airlines,
is developing in line with the Chinese people's upgraded consumption
requirements, which sees a greater role for high-quality products, fresh
goods, cross-border e-commerce and high-end manufacturing.
With state-of-the-art technology, the company aims to become a key player in the logistics sector and the supply chain.
Yu Zhanfu, partner and vice-president for China at consultancy Roland
Berger, sees broad opportunities for innovating and upgrading the
Chinese logistics network safely and efficiently and connecting both the
internal and external markets.
One of the investment opportunities comes from increased
digitalization. The participation of technology companies in the
logistics industry could reform, affect or even replace the conventional
logistics system, said Yu.
Likewise, high-speed railways are an irreplaceable part of multimodal
transport, together with sea, road and air transport, and the
preferable choice for quality express delivery, said Feng.
Qi Qi, an associate professor at Guangzhou Civil Aviation College,
said the COVID-19 outbreak highlighted the importance of logistics
during a public health emergency.
"During this critical time, we found there is an urgent need for
improvements to the transportation infrastructure, namely insufficient
air cargo capacity, a shortage of specialized freight airports, the lack
of international standard large logistics companies, less efficient
multimodal transport, and a deficiency in emergency logistics," Qi said.
Qi looked forward to concrete plans being worked out in accordance
with the nation's overall development of a modern distribution system,
with specific projects designed to strengthen China's overall logistics
sector and the supply chain.