Federal Express (FedEx) inked a frame deal last Wednesday to move its Asia-Pacific transport and distribution center to Guangzhou from the Philippines, the Guangzhou Daily reported.

The center to be built at the new Baiyun airport will open between 2008 and 2012. The sprawling new airport, one of the country's leading traffic hinges, is due to open in June 2004.

"That will create advantages for Guangzhou to build itself into a logistics center," Guangzhou Mayor Zhang Guangning said in November when the FedEx made up its mind.

With annual revenue of US$22 billion, FedEx is a global provider of transportation, e-commerce and supply-chain management services.

In Tennesee in the United States the company employs about 30,000 people at its world headquarters Memphis, world technology center in Collierville and its hub at Memphis International Airport.

China's express mail market reached 139 million units in 2002, up from 1.5 million in 1998, and FedEx wants a bigger slice of the pie.

More than 40 percent of all foreign direct investment flowing into China was earmarked for the Pearl River Delta near Guangzhou, FedEx has said.

The lease of FedEx's eight-year-old Asia-Pacific hub in Subic Bay in the Philippines expires in 2007.

FedEx had also considered moving to the former Clark Air Force Base in the Philippines, now known as Diosdado Macapagal International Airport.

FedEx says the runway and apron at Subic Bay have limited expansion room due to its deep water and hillside boundaries.

Rivals DHL and United Parcel Services operate Asia hubs in Hong Kong and the Philippines, respectively.

(Shenzhen Daily January 5, 2004)