June 24, 2017, 3:11 am
Facebook iconTwitter iconYouTube iconGoogle+ icon

COSCO to increase investments in countries involved in Silk Road

BEIJING- China’s COSCO Shipping plans to invest in a special economic zone on Kazakhstan’s border with China as it looks to increase investment in countries involved in the new Silk Road, the company’s chairman said on Sunday.

Officially named the Belt and Road initiative, the Silk Road initiative unveiled in 2013 has been touted by China as a way to boost global development through expanded links between Asia, Africa, Europe and beyond, underpinned by billions of dollars in infrastructure investment.

COSCO Chairman Xu Lirong told Reuters on the sidelines of the Belt and Road forum in Beijing that the state-owned conglomerate will sign a deal on Monday with Kazakhstan’s national railway company to take a 24 percent stake in a dry port in the Khorgos Eastern Gates special economic zone (SEZ).

He declined to comment on the value of the investment but said that China’s Lianyungang port will also invest in the project, which borders China’s far western Xinjiang region.

“We will sign the contract tomorrow to participate in the Khorgos Eastern Gates SEZ ... This will be a transhipment hub for handling goods carried by rail from China to Europe,” he said.

The Khorgos Eastern Gate SEZ was established by the Kazakhstan government in 2011 to boost the country’s exports and covers 600 hectares area of land that houses a dry port, logistic and production zones, its website says.

It is also one of the central hubs for a railway network connecting China and Europe, on which trains currently shuttle goods from laptops to wine between 27 Chinese cities and 11 European cities including London and Duisburg.

Xu also said that the company planned to increase investment in countries involved in the Belt and Road initiative and that the company believes it has a duty to ensure smooth trade flows along the countries involved in the initiative.

“We will formulate a more detailed plan for the region’s transport network and will increase our investment in these areas,” he told reporters.

The Chinese shipping giant owns one of the world’s largest dry bulk and container shipping fleets as well as a network of ports including Greece’s Piraeus. 

In January it secured a 180 billion yuan ($26.1 billion) financing pledge from China Development Bank to support Belt and Road projects.

Xu was among top Chinese company executives attending the two-day forum, China’s largest diplomatic event for the year. 

COSCO Shipping Holdings Co Ltd made a loss last year of 9.9 billion yuan ($1.44 billion) due to both persistently weak freight rates and restructuring costs.

Freight shipping firms have been hit hard by a prolonged downturn in rates caused by overcapacity and a slowdown in global trade.

COSCO, the world’s fourth-largest container shipping line, became a new company last year, born out of the merger of two major domestic shipping firms, making year-on-year comparisons difficult.

Since then it has been restructuring, selling some units at a loss and focusing on container shipping.

Revenue came in at 71.2 billion yuan. – Reuters 

No votes yet

Column of the Day

The hidden danger in Marawi

By JOSE BAYANI BAYLON | June 23,2017
‘What was supposed to be a simple police action has turned out to be the most serious military operation to date in the Duterte administration.’

Opinion of the Day

Metabolism: Why dieting fails

By DAHLI ASPILLERA | June 23, 2017
‘My doctor said that both hands lifting a gallon-size pail up to shoulder height daily can help my body’s fat-burning ability.’