Skip to main content

China goes on logistics buying spree to support ‘new Silk Road’

Acquisitions across Eurasia to enhance trade flows double to $32.2bn Alibaba will invest $1bn to raise its stake to 83 per cent in Lazada, a south-east Asian e-commerce and logistics company

James Kynge in London

A push by some of China’s largest companies to dominate the global logistics industry — reinforced by government calls to build a “new Silk Road” — is driving a surge in Chinese acquisitions overseas of warehousing, trucking and other logistics operators. Total announced acquisitions by Chinese groups of logistics companies in Europe, Asia and elsewhere more than doubled to $32.2bn in the first 11 months of this year, up from $12.9bn in the whole of 2016, according to figures compiled by Grisons Peak, a London-based investment bank. The moves complement an upsurge in Chinese overseas port acquisitions in the year to June, over which time $20.1bn in nine deals was announced. The geographical distribution of the logistics acquisitions, like the port deals before them, correspond with the area covered by the Belt and Road Initiative (BRI), a grandiose project to revamp Silk Road commerce between Asia and Europe.📎“In light of the $20bn prior ports investments, it is only logical that China would follow by implementing a strategy of ▶matching the logistics with the ports,” said Henry Tillman, chief executive of Grisons Peak. ▶“The economic model China uses for its BRI partners to enhance trade flows involves first providing sufficient energy and infrastructure, leading to increased manufacturing, and then on to ports and logistics,” Mr Tillman added. $20.1bn Chinese overseas port acquisitions in the year to June The overlap between BRI territories and logistics investments done is stark, with 25 of the 36 deals announced since 2014 falling within the nearly 70 countries that are included in the BRI. The area covered by the BRI, which was launched in 2013 by Xi Jinping, China’s leader, is home to some 4.8bn people and generates 62 per cent of the world’s gross domestic product. Mr Xi has stressed the need for “connectivity” to accelerate the implementation of the BRI, a signature ambition of his administration. “A large number of connectivity projects are in the pipeline,” Mr Xi said in May this year. “Today, a multi-dimensional infrastructure network is taking shape.” Share this graphic Alibaba Group, one of the world’s largest e-commerce companies, served notice of its ambitions in September, announcing it will invest Rmb100bn ($15bn) over five years to build what Daniel Zhang, Alibaba’s chief executive, called “the most efficient logistics network in China and around the world”. The company’s decision in June to invest $1bn to raise its stake to 83 per cent in Lazada, a leading south-east Asian e-commerce and logistics company, signalled an aggressive bet on the region’s logistics market. Lazada has 130,000 merchants on its platform along with 14 warehouses and 130 smaller distribution centres. Recommended Brussels rattled as China reaches out to eastern Europe Gideon Rachman: An assertive China challenges the west FT View: China tilts back towards a cult of personality One of the biggest deals of the year in Europe involved an agreement by Global Logistics Properties, which is controlled by Chinese private equity funds, to acquire Gazeley, which owns warehouses and distribution parks throughout Europe and North America. The October deal, put at about $2.8bn, was to add to GLP’s portfolio, which includes 1,095 logistics parks in 119 markets. The biggest Chinese logistics deal of the year involved China Investment Corporation, the sovereign wealth fund, which in June agreed to buy Logicor, a leading European logistics company with warehouses in 17 countries. The $12.25bn deal represented the fourth-largest Chinese overseas acquisition to date


Popular posts from this blog

Balochistan to establish first medical university

The Newspaper's Staff CorrespondentOctober 25, 2017QUETTA: The provincial cabinet on Tuesday approved the draft for establishing a medical university in Balochistan.Health minister Mir Rehmat Saleh Baloch made the announcement while speaking at a press conference after a cabinet meeting.“The cabinet has approved the draft of the medical university which would be presented in the current session of the Balochistan Assembly,” he said, adding with the assembly’s approval the Bolan Medical College would be converted into a medical university.Published in Dawn, October 25th, 2017

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میںPlease help the deserving persons...Salary:Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows;Welder: Rs. 1,700 dailyHeavy Duty Driver: Rs. 1,700 dailyMason: Rs. 1,500 dailyHelper: Rs. 850 dailyElectrician: Rs. 1,700 dailySurveyor: Rs. 2,500 dailySecurity Guard: Rs. 1,600 dailyBulldozer operator: Rs. 2,200 dailyConcrete mixer machine operator: Rs. 2,000 dailyRoller operator: Rs. 2,000 dailySteel fixer: Rs. 2,200 dailyIron Shuttering fixer: Rs. 1,800 dailyAccount clerk: Rs. 2,200 dailyCarpenter: Rs. 1,700 dailyLight duty driver: Rs. 1,700 dailyLabour: Rs. 900 dailyPara Engine mechanic: Rs. 1,700 dailyPipe fitter: Rs. 1,700 dailyStorekeeper: Rs. 1,700 dailyOffice boy: Rs. 1,200 dailyExcavator operator: Rs. 2,200 dailyShovel operator: Rs. 2,200 dailyComputer operator: Rs. 2,200 dailySecurity Supervisor: Rs. 2,200 dailyCook for Chinese food: Rs. 2,000 dailyCook…

China’s 'Digital Silk Road': Pitfalls Among High Hopes

Will information and communication technologies help China realize its Digital Silk Road?By Wenyuan WuNovember 03, 2017In his speech at the opening ceremony of China’s 19th Party Congress, President Xi Jinping depicted China as a model of scientific and harmonious development for developing nations. Xi’s China wants to engage the world through commerce but also through environmental protection and technological advancement. This includes Beijing’s efforts to fight climate change with information and communication technologies (ICTs) that it plans to export along its “One Belt One Road” initiative (OBOR). Xi may have ambitious plans, but could China be throwing up obstacles in its own way?In his speech, the Chinese president emphasized the need to modernize the country’s environmental protections. The Chinese state is taking an “ecological civilization” approach to development and diplomacy, with a natio…