Merger in China: new logistics giant against delivery bottlenecks

As of: December 6th, 2021 01:02 p.m.

Corona has hit global supply chains hard – especially in China. An unprecedented jam of containers creates bottlenecks in international trade. Now Beijing wants to take countermeasures.

By Astrid Freyeisen, ARD-Studio Shanghai, currently Munich

A new Chinese logistics giant should help solve global delivery problems. As the television broadcaster CCTV reports, Beijing wants to merge five existing state-owned companies into a group called China Logistics Group – with the aim of developing trade connections and freight services and better organizing global logistics chains. The new giant will operate in 30 Chinese provinces and on all five continents.

Will the competition continue?

The merger affects, among other things, the freight division of the Chinese railways. The strategic partners include the airline China Eastern and the Cosco Shipping Line, one of the world’s five largest shipping companies. Cosco owns almost 70 percent of the port of Piraeus in Greece.

German business representatives wait and see whether the Chinese mega-merger actually solves global problems: It could distribute existing resources in the markets in a more structured way, the representative of the German Chamber of Commerce in Shanghai, Maximilian Butek, estimates ARD. But he also fears that the merger is another state intervention in the market that could lead to challenges in fair competition in the medium term.

The corona pandemic has been causing disruptions and bottlenecks in global supply chains, in which China has played a central role, for months. The country is on a tough course to fight the pandemic. Initially, Chinese factories were closed for months. Then Beijing closed entire ports with its zero Covid strategy, even with a few corona cases there.

New logistics giant: China wants to solve supply chain problems

Astrid Freyeisen, BR, December 6th, 2021 12:52 p.m.

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