Ningbo, Zhejiang: A two-way journey between port and city 【 10th Anniversary of Free Trade Zone · National Search ④ 】

Ningbo Beilun is thriving due to its port.

Opening the map and looking down, this place is surrounded by the sea on three sides, extending like a long arm into the East China Sea from east to west. Along the coastlines of the north and south, there are multiple deep-water harbors linked by pearls, and the natural geographical advantages are self-evident.

But when the map is switched to satellite mode, the "clues" appear: large areas in the image are green hills. The locals say that seven parts of the mountain, two parts of the water, and one part of the land. With more mountains and less land, the intensity of land development in the entire region is approaching its limit. A fundamental question has been raised: where does the scarcity of existing land resources lead to increased development?

Opportunities will come in 2020. In August of that year, the Zhejiang Pilot Free Trade Zone was the first in the country to achieve expansion. Among them, the Ningbo area, covering an area of 46 square kilometers, was located in Beilun, and was given the functional positioning of "one hub, three centers, and one demonstration zone" by the country. It became the most concentrated, largest, and fully functional area among the three major expansion areas.

Danger and opportunity often coexist and can also transform into each other. Since the establishment of the free trade zone, relying on the combined advantages of "port+bonded zone+free trade zone", Beilun has transformed the natural contradiction between resources and development into a driving force for institutional innovation, promoting a positive interaction and two-way travel between ports and cities, and opening up new spaces for high-quality regional development.

Deep water harbor gathers advantageous resources

Meishan Island, near 30 degrees north latitude. 500 years ago, Wan Biao, a resident of Ningbo during the Ming Dynasty, described the prosperity of international trade in the vicinity as "wealthy merchants, profit-making transportation, and numerous ships filling the sea." This area is also known as one of the largest international free trade ports in Asia in the 16th century.

Today, Beilun District, where Meishan Island is located, has become the carrier of the Ningbo area of the Zhejiang Pilot Free Trade Zone and also the core port area of the world's major port Ningbo Zhoushan Port. In the Meishan Port area located on the south bank of Meishan Island, 10 container dedicated berths and 1 car roll on/roll off berth have been built, with a total shoreline length of 4400 meters. In the first half of this year, the annual container throughput of the port area reached 4.698 million TEUs, a year-on-year increase of 12.2%.

On May 9, 2023, the throughput of Ningbo Zhoushan Port steadily increased. Photo by Xinhua News Agency reporter Weng Xinyang

Climbing onto the terrace of Meishan Port Area, one can see a forest of gantry cranes in the distance, with endless stretches of several story high container yards. The staff reminded the reporter to look on the other side and saw that the dock was neatly filled with various types of cars unloaded from the roll on/roll off wheels - this is also the only complete vehicle import port in Zhejiang.

Meishan Port Area is a microcosm of the flourishing development of Ningbo Zhoushan Port. As one of the ports with the most frequent entry and exit of large and extra large ships in the world, Ningbo Zhoushan Port currently has over 120 extra large deep-water berths. In 2022, it completed a cargo throughput of over 1.261 billion tons, ranking first in the world for 14 consecutive years; Completed container throughput of 33.35 million TEUs, firmly ranking third in the world.

Photo by Gu Jie from the operation room in Meishan Port area

In the Ningbo area, there are numerous deep water shorelines, which are significant and unique geographical advantages, and also provide natural conditions for it to build an international shipping and logistics hub. In Daxie Island, which is connected to the urban area of Beilun across the sea, although the total area is only 30.84 square kilometers, the coastline is only 26 kilometers, and the deep water coastline reaches 10.7 kilometers. Less than 100 meters offshore, the water depth can reach over 20 meters.

"Such location conditions are very conducive to building large docks at a lower cost and creating a distribution center for energy and other bulk commodity trade." Yuan Yafen, the relevant person in charge of Daxie Economic Development Center, told reporters that currently, Daxie has built 21 docks with a capacity of over 10000 tons, including the largest 450000 ton crude oil, 50000 ton liquid chemical, and 50000 ton LPG docks in China, accounting for 21% of the total in Ningbo. Based on its superior location, infrastructure, and industrial cluster conditions, as well as lower logistics and warehousing costs, Daxie focuses on developing bulk commodity trade mainly focused on Lingang Petrochemical. In 2022, the total output value of petrochemical industry reached 97.5 billion yuan, accounting for 93.5% of Daxie's total industrial output value.

On the day of the interview, the reporter drove around the island accompanied by staff, and based on a complete industrial chain, gas pipelines connecting various chemical parks and enterprises stood on both sides of the road. The staff introduced that currently, behind the dock in Daxie Port area, there are gathering domestic oil storage bases such as "three barrels of oil", with a total tank capacity of over 6 million cubic meters for oil, gas, and chemicals. Aiming to build an international oil and gas resource allocation center at a high level, a full industry chain cluster of "oil head to tail" has been formed.

"Why is most of the chemical industry located in ports? Because it adapts to the large import and export of bulk materials," said Qiu Xijun, Deputy Director of the Policy and Regulations Bureau of the Free Trade Zone. Ningbo's advantage lies in having both good shoreline and port conditions, as well as an hinterland for building factories, and being relatively close to the consumer market. Especially in the chemical industry, there are many products downstream of the industrial chain, such as those that can be applied to the clothing industry in the Yangtze River Delta region. The 2-hour transportation circle is very convenient.

At present, the annual refining capacity of the Ningbo area has reached 35 million tons, and the oil trading scale in 2022 has reached 462.12 billion yuan, driving the entire region to achieve a commodity trading volume of 1.57 trillion yuan, accounting for about 3% of the national total. The sales revenue of commodities is expected to exceed 1.7 trillion yuan by 2025.

Focusing on demand and promoting institutional innovation

Relying on the advantages of port resources is one of the important paths for promoting institutional innovation in the Ningbo area.

At the beginning of this year, the technical renovation of China National Offshore Oil Corporation's Ningbo "Green Energy Port" LNG terminal located in Beilun officially began, marking the beginning of the Ningbo area of the Zhejiang Pilot Free Trade Zone becoming a pilot project for bonded LNG refueling of international navigation vessels.

For Zhejiang, bonded LNG refueling is a new attempt that involves institutional innovation in various aspects such as safety supervision. In June, the reporter walked into the factory area of CNOOC Zhejiang Ningbo Liquefied Natural Gas Co., Ltd. Six 160000 cubic meter LNG storage tanks were particularly eye-catching. Two of them had been converted into bonded tanks, and not far away, it was a reliable LNG ship dock with a capacity of 80000 to 266000 cubic meters. After the renovation, the dock has added 85000 to 30000 cubic meters of LNG refueling ships for berthing and loading functions.

Zhou Yuhan, Deputy Secretary of the Party Committee of CNOOC Zhejiang Ningbo Liquefied Natural Gas Co., Ltd., told reporters that with the support and guidance of relevant departments, the Zhejiang LNG bonded warehouse obtained customs approval in June 2021, becoming the first LNG bonded warehouse in East China. In June of this year, the world's largest LNG transportation and refueling ship, "Offshore Oil 301", successfully docked at CNOOC Ningbo "Green Energy Port" terminal, completed bonded LNG loading, and carried out the first international navigation ship bonded LNG refueling operation at Ningbo Zhoushan Port, providing strong support for the open development of the entire oil and gas industry chain in Zhejiang Free Trade Zone.

In Beilun, regulatory innovation in the maritime sector is quite groundbreaking, and crises may also become an important factor in accelerating this breakthrough. During the COVID-19 pandemic in 2020, "preventing imported goods from outside" became a new challenge for maritime supervision. The Ningbo Port Area took the lead in implementing a remote port state supervision and re inspection mechanism for foreign container ships arriving at the port, which is known as "no boarding inspection". This mechanism, combined with the previous "no boarding inspection" mechanism for foreign ships, maximizes the time for ships to stay in port while ensuring the safety of ship navigation, greatly improving the convenience of port trade.

Qiu Xijun introduced that through this system, the vitality of port production has been effectively released, and the "no inspection during temporary opening" mechanism alone has saved shipping enterprises over 96 million yuan in demurrage costs. The two innovative mechanisms have also been recognized by the Memorandum of Understanding and Cooperation on Port State Supervision in the Asia Pacific region and implemented in 21 member countries nationwide and in the Asia Pacific region. "That is to say, from local programs to international programs," he said.

Ningbo has had a strong commercial culture since ancient times, and its respect for the market is also reflected in the process of promoting institutional innovation. In the words of local officials, we must seize the demands of the market and enterprises to promote institutional innovation. Taking the cross-border e-commerce industry in Ningbo as an example, which is at the forefront of the country, it achieved retail imports of 26.06 billion yuan in 2022, ranking first in the country. Behind the achievements are institutional innovations that focus on the pain points of enterprises. The new model of cross-border e-commerce export pre warehouse supervision, pioneered nationwide this year, is a typical example.

Ningbo Free Trade Zone pioneered a new model for cross-border e-commerce export pre warehouse supervision nationwide, photographed by Gu Jie

"The pre implementation of customs supervision function is of great significance to us," said Li Feng, Managing Director of Ningbo Yaji Logistics Co., Ltd. The characteristics of cross-border e-commerce are small batch size and diverse types. In order to reduce freight costs, under the traditional export model, a batch of goods needs to be first consolidated with multiple batches of goods before entering the port, and then trigger customs arrival reports. If problems are found during inspection, it will result in the entire container being left at the port. "It's a terrible experience for suppliers to take medication even though they're not sick."

Under the new regulatory model, enterprises can enter the warehouse in the form of loose goods for customs declaration, and then proceed with LCL shipment after completing the customs clearance procedures. If there are any problems with the goods, they will enter the inspection area of the warehouse for processing, which does not affect the use of other goods. "This greatly improves efficiency and solves the most urgent problem in cross-border e-commerce exports." Li Feng told reporters that the customs clearance time for goods can be compressed from the original two or three days to one day, and logistics turnover efficiency can be increased by more than 50%.

Innovating systems and opening up new spaces

Driving in Beilun, a noticeable feeling is that there are numerous trucks flowing endlessly, and containers piled up into small mountains can be seen everywhere. According to statistics, on average, more than 20000 trucks travel between urban areas every day. In a sense, this is an objective inevitability of the development of Xingcheng Port to a certain stage.

On the other hand, after years of construction, the land development intensity in Beilun has reached 38%, far higher than the average level in the province, and the newly added space available for development in the region is very scarce. Beilun is like an ant moving house, relocating enterprises and changing cages for birds, but the results are not significant. To solve the bottleneck contradiction between the "port" and "city" systems, we still need to start with deeper institutional innovation.

Due to limited land resources and increasing demand for storage of large commodities such as oil and gas, Beilun has shifted the key to solving the problem from above to underground, hoping to excavate new development space under the "green and lush" mountains on the map. "Ground storage tanks have high safety requirements and occupy a large area of land resources, which is actually very wasteful. If underground space is used, this problem can be effectively alleviated, and the safety performance is also higher," said Qiu Xijun.

The Baidi Nian underground cavern project located on Daxie Island is an excellent case study for observing this problem-solving process. In 2017, Donghua Energy invested 2 billion yuan in the Daxie Development Zone to prepare for the construction of a 100 million cubic meter propane underground cavern project. However, due to the inability of the planning department to provide planning site selection opinions for non construction land, mining rights could not be set up for the underground cavern, making it difficult to advance the project construction.

After the expansion of the Zhejiang Pilot Free Trade Zone, the Ningbo area quickly listed it as the top breakthrough goal of "bold experimentation, bold exploration, and independent renovation", and pioneered the idea and path of "establishing underground space construction land use rights for development and construction without changing the original land type and usage status of the surface" nationwide. Through engineering and mining methods, the project that had been dormant for several years was "revived". This "Ningbo solution" has effectively broken through the bottleneck of land use in development zones and accumulated experience for the country to improve relevant management rules.

While digging deep underground, the transformation on the ground is also continuously advancing. By further optimizing the national spatial planning, Beilun reasonably arranges port layout, industrial layout, and living layout, focusing on inefficient industrial land, inefficient urban land, and scattered polluted land, and making efforts to tap into existing resources. Under limited resource conditions, "there is something out of nothing, and there is something out of something.".

The principle of utilizing new ideas and measures to revitalize existing resources has also been applied to the industrial upgrading of free trade zones, with digitalization and intelligence being the key moves.

Photo taken by Gu Jie, an intelligent AGV handling robot in a warehouse in Ningbo Free Trade Zone

During the reporter's interview, the AGV intelligent handling robot was traveling back and forth in the warehouse of Fuli Logistics Co., Ltd. located in Ningbo Free Trade Zone. The staff at the edge of the cargo area only needed to follow the instructions on the screen to remove the goods from the basket and place them in the designated position, without the need to manually pick them inside the cargo area, greatly improving work efficiency. The company's person in charge, Li Sun, introduced that the space utilization rate of intelligent warehouses is three times that of ordinary flat warehouses. By replacing traditional high-level forklifts and manual picking, it can effectively reduce storage errors and transportation damage rates, and is expected to save enterprises millions of yuan in costs annually.

"Digitization is not a multiple-choice question, but a must answer question. It's not about whether or not to do it, but how to do it." Li Guangxia, the head of the Small and Medium sized Enterprise Development Department of the Beilun District Economic and Information Bureau, told reporters that Beilun has been helping enterprises promote industry digital transformation for many years, and policy support is also relatively strong. Generally, at least 50% of the investment in digital transformation of segmented industries is subsidized. At present, about 50 companies in the industry are building digital workshops, and there are 35 digital workshops at or above the city level. Since the expansion of the Zhejiang Pilot Free Trade Zone in 2020, there have been four national level application scenarios.