To realize its ambition of becoming an international shipping centre, Shanghai, after nearly six years of feasibility studies, chose the Yangshan Islands as the ideal site for its new deep-water shipping facility.

The first phase is planned to be put into operation by 2005. With a 1.6-kilometre-long waterfront, it will offer five 15-metre-deep berths capable of handling 8,000-twenty-feet-equivalent-unit (TEU) container vessels, with each berth designed to handle 440,000 TEUs annually.

The whole project, with 60 berths along a 22-kilometre waterfront, will be completed by 2020, and will be able to handle 25 million TEUs annually.

"The deep-water port is to serve as a hub in Northeast Asia, and is part of the nation's strategic move to get involved in international competition and as well as a necessary step in the city's bid to become a shipping center," said Gu Gang, president of Shanghai Tongsheng Investment Group, an authorized financing organ for the project.

Shanghai is a city that arose to answer to shipping needs and it has soared to become the fifth largest port in the world, handling 6.34 million TEUs last year.

The figure will exceed 7 million this year, according to Lu Haihu, director general of the Shanghai Port Authority, who pointed out that the current facilities of the port fall far short of the growing demand.

Shanghai is now the base of 150 international shipping routes and more than 50 global shipping companies have their offices here. It is expected that by 2005, Shanghai will handle 10 million TEUs annually. By 2010, the figure will reach 15 million.

"The booming logistics industry means that container ships will become larger and larger, and corresponding services more and more efficient," Gu said. "As the world economy depends so much on logistics, the focus of competition has become the construction of shipping hubs."

It is estimated that around Northeast Asia, there already are 45 ports of 15-metre water depth such as Pusan, in the Republic of Korea and Kobe, in Japan.

"Yangshan Port is a must for Shanghai to meet the challenge. Even after the dredging for the first phase of Yangshan Port is done, there will still be a backlog of 2.5 million TEUs annually," Lu said.

At present, the city's existing 16 berths, with a designed capacity of 3.3 million TEUs, must work beyond capacity. The 7-metre-deep channel means that many big ships cannot be berthed.

"Serving the metropolis and the Yangtze Delta, the deep-water port will become an international attraction," said Shao Rongshun, senior engineer with a research institute under the Ministry of Communication.

Until the completion of the deep-water port in 2005, 950,000 TEUs will be transferred to destinations via Japan and the Republic of Korea annually, which means an extra 2.7 billion yuan ($327 million) in freight charges and obviously harms the competitiveness of China's products, Shao said.

(China Daily July 2, 2002)