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Shanghai in Major Port Expansion Push

China's biggest city and largest port, Shanghai, is in the midst of a multibillion dollar expansion to meet the huge increases in exports.

SHANGHAI — China’s biggest city and largest port, Shanghai, is in the midst of a multibillion-dollar port-facilities expansion intended to meet growing needs propelled by huge increases in exports.

Port officials said the volume of goods being handled is increasing by 30 percent a year, and in order to cope, they are investing in new berths and even constructing a bridge to an island port 18 miles off the coast.

It’s all part of the effort to handle China’s enormous export growth. The trade is straining the global commercial shipping market, and maritime industry analysts assert that Chinese goods are a major reason for current boosts in cargo rates, which are expected to continue rising in the next several years.

To speed up the task of meeting the growing cargo-handling demand, Shanghai authorities also are reaching out to foreign investors and leading global terminal operators.

In September, Shanghai International Port (Group) Co. and Hutchinson, the Hong Kong-based global terminal operator, entered into a 4 billion yuan, or $483 million at current exchange, joint venture toward expansion of the Shanghai Waigaoqiao Port.

Lu Haihu, the port’s president, told reporters in London that the expansion would increase the port’s capacity by 2 million 20-foot containers, known as TEUs, next year. That would allow the facility to boost its volume by more than 10 percent.

Shanghai also has embarked on the construction of the Yangshan deep-water port terminal, located about 18 miles from the city on two islands in the East China Sea. That $2 billion project is designed to eventually handle 25 million TEUs a year. The first five berths, which are to open in 2006, will have an annual capacity of 2.2 million TEUs, Lu said.

“Shanghai is an open city,” said Song Chao, information director of the Shanghai municipal government.

Major shipping lines, including Maersk, APL and P&O Nedlloyd, all operate offices in Shanghai.

During the first half of 2004, exports of textiles and apparel from Shanghai’s port were worth $17.6 billion, up 35 percent from the same period a year earlier. Of that volume, $4.3 billion was delivered to Japan, $3 billion to the European Union and $2.8 billion to the U.S., according to customs statistics cited by the official Chinese Xinhua news agency.

Textiles and apparel accounted for about 25 percent of Shanghai port’s total exports.

For the first 11 months of 2004, Shanghai handled imports and exports valued at $286.8 billion, up 41 percent from 2003.