China Merchants Group looks to promote 'Shekou model'

State-owned enterprise China Merchants Group aims to participate in the Belt and Road Initiative by replicating the success of Shenzhen's Shekou Industrial Zone through the development of foreign port cities.

"The status quo in many countries involved in the Belt and Road Initiative is similar to Shekou 30 years ago. Shekou's model can be replicated to develop foreign port cities more effectively," said Zhang Lin, deputy general manager of China Merchants Shekou Industrial Zone Holdings.

Once a small coastal fishing village, Shekou is now a metropolitan hub with a per capita GDP of $60,000, according to China Merchants Group.

"Shekou took more than 30 years to build into a mature community with a vigorous economy and livable environment," said Zhang.

"But now, with our experience, this can be replicated in some five years in foreign ports."

When Chinese enterprises do business abroad, they can be exposed to high risks arising from uncertain political situations and unfamiliar societies, said Li Yubin, vice-president of China Merchants Port Holding.

"Ports are the starting point of all economic activities," he said.

"With the development of an industrial park and city, the (Shekou) model is more like an ecosystem concept, producing a hub to boost communications, logistics, business, information and capital."

Beginning in 1979, Shekou was developed as China's first port open to foreign trade run entirely by enterprises. Located at the southern tip of Shenzhen, facing Hong Kong, it is now of strategic significance as a transport and logistics hub.

The first successful overseas application of the Shekou model concept was in the Port of Djibouti, East Africa.

China Merchants Port Holdings, the group's ports and logistics arm, began constructing a new port in Djibouti in 2012.

By last year, the port's profit had increased 200 percent compared with four years earlier. Cargo traffic had also increased as it processed more containers and bulk cargo. The annual growth of local workers' salaries has been about 8 percent over the four years.

A free-trade zone has also been planned with $400 million of initial investment.

"We not only focus on investment and return, but also pay attention to benefiting local people's lives," Li said.

The group, which is promoting its model in Togo, Tanzania and Sri Lanka, is investing $2 million to provide training opportunities for local staff in Djibouti over three years.

It owns a network of 49 ports in 19 countries and regions.