By Robert L. Wallack, AJOT A number of factors are contributing to the People’s Republic of China’s inland infrastructure construction of highways, roads, railways, airports and container depots. Industrial and government investments are shifting from eastern coastal provinces to inland regions because of increasing costs of labor and land and more demand for logistics services are from a growing retail sector to satisfy consumer demand and not just for overseas exports. Infrastructure development is evident in the cities of Nanjing and Suzhou of the Yangzte River Delta outside of Shanghai as well as in central and western cities, provinces and autonomous regions such as Chengdu and Inner Mongolia Autonomous Region (IMAR) bordering Mongolia to North Asia. China’s Western Development Strategy toward inland investment for logistics infrastructure is always evolving. Since 1997, the government with World Bank assistance began and constructed by 2005 eight inland container depots (ICD) to improve the flow and storage of goods through the Port of Tianjin near Beijing and reduce economic disparities between coastal and inland areas. Baotou Transportation International Container Terminal, IMAR is one of these ICDs and an important link with Tianjin Port for shipments for Mongolia’s fast growing economy. “We look forward to further improvements by the Chinese government to investing in more efficient transportation infrastructure and intermodal networks to accommodate for the expansion in the retail market over the next five years (PRC’s 12th Five Year Plan),” said a spokesperson for Orient Overseas Container Line (OOCL) in a recent interview with the American Journal of Transportation. The World Bank is continuing to assist China’s transport infrastructure effort to increase their rail network to 120,000 kilometers by 2020 as proposed in China’s Mid-and Long-term Railway Network Plan. The IMAR Huhehaote-Zhangjiakou $4.5 billion railway project along the Beijing corridor is in the works to improve containerized rail freight traffic to and from Mongolia. The Asian Development Bank (ADB) is also completing the final highway segment in Mongolia on Asian Highway 3 to link Ulaanbaatar capital city to border port Zamyn-Uud, then across to IMAR to increase container and project cargo through Tianjin Port. Foreign Investors are recognizing the inland shift as proven by foreign direct investment (FDI) flows. China Daily reported recently, that the west accounted for only $12 billion of total 2011 FDI of $116 billion in China, but the west saw a growth rate of 28% or more than four times the rate in the east. Also, since 2007, the government policy selected 44 cities in the country’s central and western regions as destinations for export-processing businesses for moving inland from coastal cities. This industrial shift is evident in the value of the processing trade inland, which increased by 78.4% to reach $82.3 billion in 2011 and from 2006-2011 accounted for 6.3% of the country’s total value of processing trade from 2.5%. Inland logistics services are receiving more attention from the government in order to make new transport infrastructure operational and up to international standards. In 2010, the National Development and Reform Commission (NDRC), the national central planning body, published policies to improve logistics for the inland market and set up a lead team to coordinate. The NDRC and the National Bureau of Statistics will issue data on logistics and keep the data updated. In addition, the NDRC will make policies for training, business standards and weed out low competitive logistics firms and improve the strong. “We think that all the above measures are needed, especially the weeding out system to help our logistics business be optimum,” according to Cai Yu, founder and managing director of Transluck Logistics, a Shanghai based supply chain service provider. Road transport is the dominant mode to serve the growing demands on the retail sector by logistics service providers and accounts