China Shipping moves hub
    to Malaysian port: official

  Agence France Presse
July 3, 2005

CONTAINER shipping giant China Shipping Group has moved its regional headquarters to Malaysia from Singapore on expectations of increased activity from Port Klang, a senior official said Sunday, July 3.

"Trade between Malaysia and China is growing. They are positioning themselves to make direct calls between Malaysia and China," Westport Malaysia executive chairman G. Gnanalingam told AFP.

Westport, located in Port Klang, on the Strait of Malacca west of the capital Kuala Lumpur, is one of Malaysia's largest container ports.

Gnanalingam said China Shipping had decided to move its operations to Malaysia because the company wanted to be able to draw upon skilled manpower at competitive prices.

Analysts said the move demonstrated Westport's efficiency and would allow Malaysia to further challenge Singapore's status as the region's shipping hub.

"Definitely it will enhance Westport's status as a reputable port and this is another coup for Malaysia against Singapore," Suhaimi Saidi, an economist with AM Securities, told AFP.

Singapore had already lost Denmark's container shipping giant Maersk Sealand in 2000 and Taiwan's Evergreen in 2002 to Malaysia's Tanjung Pelepas port, on the southwestern tip of Malaysia.

Gnanlingam said with the tariff liberalisation programme under the ASEAN-China Free Trade Area coming into effect on July 1, trade between Malaysia and China would grow at a faster pace.

China and the 10 Southeast Asian member countries of the Association of Southeast Asian Nations signed historic trade pacts last November to pave the way for the world's biggest free-trade zone by 2010, covering two billion people.

China Shipping, which had moved its container transhipment hub to Port Klang in 2000, expects its transhipment volume through the port to rise to 350,000 20-foot-equivalent units (TEU) this year, from 300,000 TEU last year.

"The relocation of the regional headquarters is an important adjustment to the strategy in running the container business," its vice-president Zhang Guo Fa was quoted as saying by the Star newspaper Saturday.

Zhang said the Malaysian government's incentive to grant the company 100 percent foreign equity in its Malaysian operations, backed by the rise in trade between China and Malaysia, were the deciding factors for the relocation.

By 2010, China Shipping aims to be among the top three container shipping companies in the world.