By Robert L. Wallack, AJOT Nanning, the capital city of Guangxi Zhuang Autonomous Region in the southwest of China, was the host of their annual Pan Beibu Gulf Economic Forum in August and the ASEAN Business Expo and Investment Summit in October. Guangxi is a magnet for regional trade and investment, especially since January 1st of this year that opened the China-ASEAN Free Trade Area (CAFTA). The Guangxi Beibu Gulf International Port Group (GBGIPG) is investing in ports and logistics to build a hub for regional trade. In the first six months, China-ASEAN trade is up 55 percent over the same period last year for total trade of $136.5 billion and investment totaled $69.4 billion of which ASEAN invested $59.8 billion in China. The CAFTA is the world’s third largest free trade zone and the largest in the developing world. Now, most produced are tariff-free between China and the ASEAN member countries of Brunei, the Philippines, Indonesia, Malaysia, Thailand and Singapore. Guangxi will benefit since the entire market potential of 1.9 billion people and total trade volume of $4.5 trillion will need modern and efficient seaports, barge, land ports, road, rail and logistics services. In August, Guangxi improved their strategically important regional trade and transport location by a regional port investment agreement. The Guangxi Beibu Gulf International Port Group agreed with Haikou Port, Guangzhou Port Group, China Shipping Container Lines, Co. Ltd., Singapore IMC Shipping Services, Yulang Port of Singapore, Thailand-listed Regional Container Lines (RCL) and Cambodia’s Sihanoukville Port to construct a Pan Beibu Gulf logistics network with new routes and facilities, according to China Daily. The Guangxi government plans to invest $866 million for 26 port construction projects in the region. The Port Group is comprised of Fancheng Port, Beihai Port and Qinzhou Port and is responsible for port construction and operations. The merging of these three ports under the GBGIPG began February 14, 2007 “because they are very close and in a common market, common navigation routes and they still have competition, but now can grow together,” said Mr. Huang, official spokesperson, GBGIPG in an interview with the American Journal of Transportation. The final transaction of the merge was $324 million between Shenzhen-listed Beihai Port Company and the state owned GBGIPG. The investments in the ports’ infrastructures are needed because by the end of 2012 the throughput of the three ports will exceed 300 million tons from the 2009 throughput of 94 million tons which was 16.3 percent over 2008. Container lines and port terminal operators are taking note of the growth in market demand. Mr. Jens Eskelund, Senior Director, Maersk China Ltd. told AJOT, “APMT is certainly following this growth market with great interest and are exploring several new development opportunities in the ASEAN area, yet we do not have any terminal projects in the Beibuwan area.” The Guangxi and China central governments’ are constructing new road and rail routes to and from Fancheng Port and are improving interchanges for freight traffic around urban areas for the Port’s new iron and steel industrial complexes. “Port capacity expansion depends on road and rail capacity expansion and enterprises cannot increase production until port capacity increases, therefore companies use port storage as expansion unfolds,” said Mr. Zhou Wen Qiang, Manager, Fancheng Port to the AJOT. Zhou is also concerned with the constraints to regional trade from lack of capacity at the Southeast Asia ports. “We are now planning to build ports in ASEAN countries such as Thailand, Vietnam and Myanmar. We have not invested so far, and an agreement with Spain and with Hong Kong’s Li Kai Shing did not go through, therefore we are going to list our group on the stock exchange,” he said. The FTA is impacting Fancheng Port as trade volume with ASEAN was 3.2 million tons last year and was 2.1 million tons in the first half of this