Developing China's Ports

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Developing China’s Ports

FIGURE 2.7

Illustration of revenue sources for port enterprises Shipping company or agent

Payer

Fees and charges

Pilotage fee

Port facilities

Payment receiver

Pilotage service provider

Cargo owner or agent

Tug service fee

Supplying and pollution treatment fee

Berthing charges

Port operation lump-sum fee

Warehouse usage fee

Tug

Water, oil, gas supply facilities

Docks, floats, anchorages

Handling, transportation, rainproof equipment, and so on

Warehouses and storage yards

Tug service provider

Suppliers of water, oil, and gas for ships

Port operators

Port facility security fee

Harbor dues on cargo

Breakwaters, waterways, anchorages

Provider of basic or general port infrastructure

Source: Original analysis conducted for this report by PricewaterhouseCoopers (PwC).

At the outset of China’s opening to the world, the government (through the Ministry of Communications) cited macroeconomic strategy as the justification for setting port charges at certain levels. As foreign investment in and operation of ports became more prevalent, especially in the operation of container terminals, government control over port tariffs was relaxed somewhat. As decentralization progressed, local governments adjusted port charges to optimize cost recovery and price competitiveness, eyeing the practices of other ports. Since 2015, the MoT has continued to promote the market-oriented reform of port charges and merged redundant items to form a simplified list of charges. According to “Port Charges and Charges Measures” port charges are now categorized as (1) government-determined, (2) government-guided, or (3) ­enterprise-determined (Ministry of Transport and National Development and Reform Commission 2015). In 2019, a notice on the revision of port charges reduced some government charges (including cargo port charges, security fees, and pilotage fees), consolidated certain charges, and required pricing policies to be enforced and regulated (Ministry of Transport and National Development and Reform Commission 2019). Most important in the first category are port construction fees; designed as a dedicated source of funding for coastal public port facilities, IWT infrastructure and inland ports are now used as a tool for macroeconomic policy (box 2.4). In 2020, the port construction fee was removed, and the fee to compensate for ship pollution was cut in half. The same year, all government-determined port charges were reduced by 20 percent from March 1 to June 30 as a way to stimulate trade following the initial downturn at the start of the COVID-19 (coronavirus) pandemic. These fee modifications were later extended to the end of 2020.


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