Transport Firms To Gain From U.S.-China WTO Pact
The accord between China and the U.S. on Beijing's entry to the World Trade Organization (WTO) will boost trade and benefit transport companies in both countries, industry officials said.
"We believe that China's entry to the WTO will stimulate growth in the volume of trade flowing in and out of China," said Eddy Chan, mid-Pacific region vice-president for Federal Express, which provides air service to three Chinese cities five times a week. "As such, FedEx would be well-positioned to handle any increase in import and export transportation volumes," Chan said.
Total U.S. trade with China grew to more than $85 billion in 1998, making China the fourth largest trading partner of the U.S., according to the U.S. Department of Commerce.
Chinese Firms Will Also Benefit
Chinese companies would also benefit from increased traffic between China and the U.S., analysts said.
"As a whole, the WTO deal should be beneficial to the overall economy," said an analyst at a foreign brokerage in Shanghai. "Shipping companies and airlines will benefit directly because of more traffic coming into China and going out too."
Analysts said Chinese firms likely to benefit included Hong Kong-listed China Shipping Development, New York and Hong Kong-listed China Eastern Airlines and Shanghai hard currency B share firm Zhenhua Port Machinery.
Foreign Firms Hope For Opening
U.S. and other foreign firms were confident China would loosen its tight grip on shipping services after its entry to the WTO, industry officials said. "For shipping services, the difference will be black and white," said an official at a foreign shipping agency.
Foreign shipping agencies, which help arrange cargo transport and contract out ships, are not allowed to conduct business directly now and must use Chinese subcontractors, he said.
Industry officials said the agreement was expected to allow foreign shipping agencies to set up joint ventures. - (Bill Savadove, Reuters)