2.5 Ports as an anchor for growth: The case of the Binhai New Area

Guangzhou, Tianjin, and Qingdao; (2) cities with rapid growth in throughput and steady but moderate growth in GDP, such as Ningbo, Dalian, Tangshan, Yingkou, Lianyungang, Rizhao, and Zhanjiang; and (3) cities with rapid GDP growth but moderate or stable port throughput, such as Shenzhen.

To understand the causal impact of ports on the economic outcomes of port cities, a rigorous econometric analysis was conducted that exploited a planning policy shock on China’s ports in 2006. The findings show that cities with major ports have attracted large amounts of foreign direct investment and have relatively high levels of GDP per capita when compared with cities without a port. The classification of ports into main ports, major ports, and supporting ports by the MoT allows for an analysis of the effects of this classification on the economic development of the port city. Major ports were given more funding for upgrades, and it is significant that these port upgrades, which increased the throughput of the targeted ports, led to higher fixed-asset investments and foreign direct investment in the cities hosting these ports, as well as higher GDP per capita. In addition, port cities perform better on all three outcomes as compared with neighboring cities that do not have ports.

In line with the positive effect of ports on the regional economy, port cities have embraced port development as an engine for economic growth (box 2.5). Favorable tax policies and subsidies for ports have been issued over time by local governments. For instance, land for a port’s wharves is often exempted from land-use taxes (State Administration of Taxation 1989). In line with the central government’s Land Administration Law, land used for transportation infrastructure supported by the state may be and often is provided free of charge (State Council 2004a). Cities also support port development through land exchanges. Ports relocate away from the city center for a variety of reasons, including limited space and lack of water depth for ships. Depending on the trajectory of city growth, such a move can also be beneficial for the city. Relocating a port away from the city center can reduce negative environmental and transportation impacts while freeing up space for urban waterfront development.

BOX 2.5

Ports as an anchor for growth: The case of the Binhai New Area

The Tianjin Binhai New Area is located on the east coast of Tianjin, about 120 kilometers from Beijing, and is part of the Bohai Economic Rim. The area, which includes the Port of Tianjin, was formally approved in 2009 under the 11th Five-Year Plan (2006–10). Envisioned as a gateway from northern China to the rest of the world, its nine functional zones include a port area, an international shipping and logistics center, high-tech industries, heavy chemical industries, tourism, and service industries.

Since 2008, the Tianjin municipal government has been supporting the opening of the Binhai New Area through policy reform and financial support. Part of the Tianjin municipal government’s special fund has been used to enhance the capacity of the Dongjiang Free Trade Port Zone, with the aim of attracting companies dealing with shipping logistics, import-export processing, warehousing, specialized transport, procurement and distribution, and other shipping-related activities. To that end, such companies were given discounts on the purchase or lease of office buildings and space in the Dongjiang Free Trade Port Zone. Small and medium-size enterprises were also granted subsidized loans on advantageous terms.

Source: Song, Wu, and Xu 2019.