International pivotal ports refer to those major ports that are located on major international shipping routes and are noted for high efficiency， low cost and large freight-handling capacities. One important feature of such ports is that the volumes of international transit freight they handle are large and account for a high proportion of all the freight they handle. At a time when economic globalization is constantly deepening， international pivotal ports are playing an increasingly important role in enhancing the international competitiveness of a regional economy. Therefore， the governments of some countries and regions have taken effective measures to develop their international pivotal ports. In East Asia， Hong Kong， Singapore， Pusan and Kaohsiung have become the world's four largest container ports. Besides， competition is also very intense among other major ports in East Asia.
In the past two decades of reform and opening up， China has become the sixth largest trade country in the world. Accordingly， its ports also scored tangible development. As the development of China's ports is mainly attributed to the development of its own trade， they have not become international pivotal ports. One striking feature is that international transit freight still accounts for a very low proportion of the freight handled by Chinese ports. International transit freight through Hong Kong， Singapore and Kaohsiung respectively accounts for 40 percent， 70 percent and 70 percent of the total volumes of freight they handle. On the other hand， international transit business accounts for only 0.65 percent of the Yantian Port in Shenzhen. Therefore， in face of an increasingly intense international competition， developing international pivotal ports is of strategic importance to China.
First， developing international pivotal ports is a requirement of increasing China's export competitiveness. China has become the world's sixth largest export country， and the competitive advantage in cost and price will continue to be the main competitiveness of China's export for a considerably long period of time to come. And higher efficiency of port handling constitutes an important part of the lower cost of export products. Investigations indicate that Yantian Port was mainly selected as the port of exit for the containers in the region of the Pearl River delta， with the cost for each container lowering more than 200 U.S. dollars than selecting Hong Kong as the port of exit. Therefore， it helps increase the competitiveness of China's export products. However， as the efficiency of domestic ports in customs clearance is not high， many enterprises still choose to export directly through Hong Kong. In addition， as most of this region's export is in the form of processing trade， the cost of import has a direct impact on the competitiveness of export. When 85-90 percent of Guangdong's import is through Hong Kong， higher import cost also weakens the competitiveness of the region's export. In addition， the imbalance in import and export has led to a serious imbalance in the ratio of light and heavy containers. Besides， because of the small amount of international transit business， the cargos exported through these ports have to wait longer and thus bear higher costs. This is also unfavorable for increasing the competitiveness of China's export. So if China can develop two international pivotal ports respectively in the two regions of the Yangtze River delta and the Pearl River delta， the competitiveness of its export will be further increased.
Second， developing international pivotal ports is a requirement for improving the attraction of foreign investment. China has been selected by international investors as an important manufacturing base for export products. The export of foreign-invested enterprises is already accounting for about half of China's total export. At present， the efficiency of customs clearance has become an important aspect when foreign businessmen evaluate China's investment environment. Many foreign-invested enterprises are unhappy about the existing efficiency of China's customs clearance. Recently， Shanghai carried out a experiment reform called "great customs clearance". As a result of the experiment， the efficiency of customs clearance for air freight improved greatly. Many large transnational corporations， such as Intel， indicated that they would not only expand their production investment in Shanghai， but also move their research and development activities to Shanghai. If China can reform its customs clearance system and establish international pivotal ports， such measures will definitely improve the country's appeal to foreign investors.
Third， developing international pivotal ports is a requirement for increasing the added value of China's processing trade. The export of the processing trade has already accounted for more than half of China's total export， and increasing the added value of the processing trade is an important way to further increase the contribution of the processing trade to the national economy. In recent years， thanks to the mass transfer of the 1T and other manufacturing industries to China， electromechanical products manufacturing has become the fast-growing and largest sector in the export of China's processing trade. Unlike the traditional labor-intensive products， the processing trade of electromechanical products has some unique features， such as "zero inventory for production， globalization of procurement and networking ordering". These have put forward higher requirements for the efficiency and cost of customs clearance and transport. At present， the low efficiency of China's customs clearance has affected the processing enterprises to produce high-end products. Therefore， reforming the customs clearance system and developing international pivotal ports will help increase the added value of China's processing trade.
Fourth， developing international pivotal ports is a requirement for developing modem distribution and strengthening China's status as the world's manufacturing base. As China's status in the international manufacturing division of labor has drastically elevated， the industrial chain of the country's foreign trade has been extending not only to the upper stream but also to the downstream services. To further reduce costs， some well-known international retail enterprises are planning to establish goods distribution centers at the ports close to China's main export bases. For example， Val-Mart plans to establish a procurement and distribution center in Shenzhen for procurement， classified packaging， container grouping and delivery. Its annual procurement is expected to reach 2 billion U.S. dollars. This will not only promote the development of China's modem distribution， but also further spur export and strengthen China's status as the world's manufacturing base. However， the existing customs clearance system is inconsistent with the requirement for developing international distribution centers.
II. The Customs Clearance System is the Main Factor Restraining the Development of International Pivotal Ports.
After more than two decades of reform and opening up， China has already had the basic conditions for the development of international pivotal ports. First， the coastal cities in east China are all on the major international shipping routes in western Pacific and have an enormous amount of goods for international distribution. Statistics indicated that in 2000， the containers handled in East Asia accounted for 50 percent of the world's total. Therefore， there is a great potential for the ports in east and southeast China to develop international transit business. Second， China's ports handle a tremendous amount of international trade. China is already the world's sixth largest international trade entity. As its export products are mostly low-priced products， the amount of goods could be even higher in international rankings. Besides， China's international trade is mainly concentrated in the regions of the Yangtze River delta and the Pearl River delta. Third， China has come a long way in improving its port infrastructure and management. Thanks to government investment and foreign investment， China's port infrastructure has improved drastically. The ports of Shanghai and Shenzhen can not only meet the demand of the country's own foreign trade， but also has capacities to develop international transit business. Port management has also drastically improved. For example， the Yantian Port in Shenzhen is invested and managed by the Hehuang Group， and its port management has reached the international standard. In 2001， China's Shanghai Port and Shenzhen Port respectively ranked the fifth and eighth among the world's largest container ports.
However， China has no international pivotal ports yet. This is primarily because the customs clearance system of China's ports is backward and the efficiency of customs clearance is low compared with the highly competitive international pivotal ports in China's neighboring regions. This has prevented Chinese ports from becoming international pivotal ports. It is true that China's departments in charge of customs， ports， inspection and quarantine and frontier defense have all carried out reforms of the customs clearance system and scored marked achievements. But compared with the port management efficiency of the competitors in China's neighboring regions， our own port management system is still very backward.
First， inter-departmental coordination needs to be strengthened. Freight customs clearance involves many departments， such as customs， inspection and quarantine， frontier defense， port affairs and port management. It is a systematic project. Although different departments all carried out reforms and scored marked achievements， the lack of coordination between different departments arising from the lack of a strong and unified leadership and coordination has affected the overall improvement of the efficiency of supervision and management. For example， repeated opening and inspections of containers still occur in different departments of the ports. The city of Shanghai introduced a "freight by air" customs clearance for 49 large transnational corporations such as Intel and JVC located in the Waigaoqiao Bonded Area. The time required for customs clearance has been shortened to six hours from the original 96 hours. This is an indication that China's existing customs clearance system has a large room for improvement.
Second， the backward management concept， procedure and method have all contributed to inefficient customs clearance. Regarding management concept， the prevailing international practice is to adopt the method of risk analysis and carry out selected inspections. The China Customs， however， emphasizes overall inspections， which leads to a high proportion of inspections. In procedure， the examination and
inspection have been mostly done at the ports， which seriously burdens the ports and makes them difficult to improve efficiency. The import and export enterprises must submit written declaration to the port customs， and the port customs must examine and verify the written declarations before handling the relevant formalities， carrying out inspections and releasing. In transit business， the customs requests that the cargos must be shipped to the customs houses in charge， and be examined and verified by the customs houses in charge before they are released. In fact， the port authorities not only accept the declarations and examine and verify them， but also carry out the actual work of supervision， control， inspection and release. With so many operating links， so complicated formalities and repeated inspections， the customs clearance can in no way be fast. The stipulations of the authorities on control procedures are too vague and lack specific details， which also leaves too much room for the enforcement personnel to maneuver. In addition， the strictness of inspection also differs from one place to another. Although some customs houses have established e-customs systems， they still request the enterprises to submit declarations in both electronic and written forms. This stipulation increases the workload instead of increasing efficiency. The authorities observe an eight-hour working schedule from 9:00 a.m. to 5:00 p.m.， which is grossly unsuitable for the 24-hour operations of the ports. All these problems have led to a low efficiency of customs clearance at China's ports. The enterprises in Shenzhen report that importing or exporting goods through Hong Kong via land ports can be completed within one day because a centralized customs declaration is enforced there. If the import and export are made through Chinese seaports instead， import will require 3-6 days and export 1-3 days to complete.
Third， the control system for transit freight does not conform to the prevailing international practices and therefore seriously impedes international transit business. According to world-famous shipping companies， a system of filing declarations for record is used internationally for international transit containers， which means that while declarations are filed， the goods can be loaded. Normally， the transit formalities can be completed within 24 hours. At some ports， the goods can be unloaded and loaded instantly so that transit can be instantly completed. At China's ports， however， the procedures for the control of international transit freight are similar to those for import and export cargos. They must submit declarations for entry and for exit， and the transit formalities normally require 48 hours to complete， which makes instant transit totally impossible. Therefore， some large shipping companies carry out their transit operations mainly through Hong Kong， Singapore or other ports in East Asia， instead of the ports of the Chinese mainland.
Fourth， the control system for the bonded areas is not conducive to the development of international distribution. The pivotal function of modem distribution is also one of the important functions of international pivotal ports. With China's export expanding， some large transnational corporations begin planning to carry out procurement， classified packaging， container grouping， storage and distribution in the bonded areas close to some ports. This service extension will greatly increase the added value of China's manufacturing industry. But the existing policies and control system for the bonded areas have restricted the development of international distribution. For example， the transnational corporations hope to send the goods they procure in China to the bonded areas for centralized classified packaging and container grouping before they are shipped to the target markets. But the existing stipulations provide that the goods exported to the bonded areas are not deemed to have left the frontier and therefore cannot claim export tax rebate.
III. Policy Suggestions
First， the "great customs clearance" experiment on system reform should be introduced to serve the goal of establishing international pivotal ports. In light of the global shipping pattern， it is feasible for China to develop two major international pivotal ports respectively in the Yangtze River delta and the Pearl River delta. Therefore， we suggest that the ports with great potential in these two regions should be selected for the "great customs clearance" system reform experiment. The basic principles for the reform of customs clearance operations should be integralized， informationized， standardized and specialized. A comprehensive and systematic reform should be carried out in the procedures of customs clearance， the operating methods and the methods to realize functional management. At the same time， a new unified and standardized business management system should be established and a new management model should be created to fundamentally enhance the efficiency of customs clearance system and competence of law enforcement. This will minimize the management risks and integrity risks and promote the modernization process of the port control system so as to meet the requirements of China's economic development and its participation in economic globalization.
Second， the relationship between the "protecting the country" and "service and development" should be correctly handled. Protecting the country is not the goal. The final goal is economic development. If the customs control system is too loose， there will be rampant smuggling and free flow of counterfeiting commodities. This is harmful to economic development. If the customs control is unscientific and inefficient or too strict， China can also miss the development opportunities in a situation of economic globalization. This is equally harmful to economic development. Therefore， it is necessary to correctly understand the relations &nbs
Accelerate Customs Reform[全文结束]
