In Nanjing, Thursday is the best day to eat at Mrs. Huang’s Yunannese cuisine restaurant. Why? Because it is the day that long dou, or dragon bean, shipments from China’s central Kunming province arrive in Nanjing, which is located in the eastern province of Jiangsu. According to Mrs. Huang, she and her husband could not serve certain traditional dishes at their restaurant five years ago because it was so difficult to find non-local ingredients. To transport products by train between Yunnan and Nanjing takes nine days, and by then the dragon beans would be unusable. Now, she said their restaurant can serve more traditional cuisine because it is much easier to buy the products online and have them shipped within a few days by plane.
Whether they are looking to purchase Yunnan dragon beans, Swiss chocolate or Italian olives, residents in China’s urban centers are finding it increasingly easy to acquire products not available in stores even several years ago due to the development of logistics networks in China. However, while China’s smaller cities are just beginning to enjoy these distant products, the country’s major cities are being strained to their logistical limits.
Growth in China’s population in urban centers paired with the increased buying power of the country’s middle class, however, is driving demand and overburdening airport cargo capacities in major cities like Beijing and Chengdu.
Beijing Capital International Airport (PEK) is one of the busiest airports in Mainland China and the Asia-Pacific region and handled over 2 million tonnes of cargo in 2018. The airport currently has three runways and is a hub for Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines. Airport authorities, however, are out of options to expand operations at PEK, and carriers, including China Eastern and China Southern Airlines, are struggling to secure landing slots for scheduled freighter flights in Beijing due to capacity issues at PEK.
Chengdu Shuangliu International Airport (CTU) has been rising in Chinese airport rankings over the last several years, and will likely rank among the top 50 busiest airports worldwide in 2018. The airport is a hub for several carriers – Sichuan Airlines, Air China, Chengdu Airlines, China Southern Airlines, China Eastern Airlines, Shenzhen Airlines and Lucky Air – and has two runways. The first was extended to 3,600 meters in 2001, followed by the construction of a second 3,600-meter runway in 2008, which became operational in 2009. Even with those expansions, the number of available slots for dedicated freighters are limited at the airport, meaning its operations are “basically saturated,” according to local residents.
To avoid losing carriers due to overburdened capacity at airports, while also preparing for future growth, Chinese government officials are constructing the new Beijing Daxing International (PKX) and Chengdu Tianfu International airports. PKX will be constructed in southern Beijing and will have four runways with capacity for 20 million tonnes of cargo by 2025, according to China Daily. Chengdu Tianfu will open with three runways and capacity for 700,000 tonnes of cargo by 2025; following later phases of construction, the airport will have six runways total and cargo capacity of 2 million tonnes.
PKX is scheduled to open Sept. 30, this year, while construction of Chengdu Tianfu is anticipated to be completed in the latter half of 2019. As the construction of two massive airports nears completion in Beijing and Chengdu, Air Cargo Airports analyzes where cargo will flow as China seeks to rebalance its growth and alleviate pressure to logistics in the two cities where airports’ cargo capacities are being pushed to the limits.
The coordinated development of infrastructure and policies
China’s stellar economic growth over the last two decades has reached a point of maturation, compelling government authorities to consider alternate avenues for sustainable development while also balancing the disparate growth between rural and urban regions. To do this the government has identified 19 city-clusters across China to date – two of which center around Beijing and Chengdu – to develop through complementary infrastructure and policy expansion and reform.
The concept for city-cluster planning in China first entered government discussions in 2010, at which time the central government determined three major regions – the Pearl River Delta, Yangtze River Delta and Beijing-Tianjin-Hebei (Jing-Jin-Ji) – in its 2011 Five Year Plan (FYP) to develop into world-class clusters by 2020. Beijing’s new PKX will serve it surrounding Jing-Jin-Ji city-cluster region, and Chengdu Tianfu its surrounding Chengyu area.
Through the development of city-clusters, the government seeks to address China’s “unbalanced, uncoordinated, and unstable growth” by continuing the shift begun under the 2006 FYP toward rebalancing the economy away from scattered infrastructure by developing a consumption-led model of economic growth, according to China’s National Reform and Development Commission. At a macro level, this means the government needs to coordinate urban planning and infrastructure development between urban-rural, interregional and global networks, which it is aiming to achieve through its Belt and Road and city-cluster agglomeration plans. At a micro level, city-clusters and the logistics providers they host will experience the tangible rollout and impacts of these plans.
As the central points to the three city-clusters first identified, Hong Kong, Shanghai and Beijing as the center of these city clusters have each experienced tremendous economic growth, which has attracted a massive number of internal migrants over the last twenty years. Due to the drastic shift in population levels and role of these cities as centers to China’s urban hub-and-spoke urban development models, increased demand for goods has been concentrated in these cities, generating congestion in their airports, road traffic and logistics networks.
Along those same lines, the International Air Transportation Association (IATA) released its 2019 airport flight congestion report in January, in which PEK, Tianjin Binhai (TSN), Shanghai Pudong (PVG), Shanghai Hongqiao (SHA), Guangzhou Baiyun (CAN), Hong Kong International (HKG) and Shenzhen International (SZX) airports were all designated as “level 3” congested airports, meaning that the airports are at full capacity for runway and parking availability. CTU and Chongqing International (CKG) airports have likewise been ranked as hosting level 3 congestion.
In the realm of infrastructure development, the Chinese government has initiated plans for the construction of airports, bridges, railways and roads nationwide. In conjunction with the launch of these plans, the government established reforms to policies controlling Chinese citizens’ internal migration patterns between rural and urban areas.
While these infrastructure policies are being implemented nationwide, the government has taken a new approach to the development of the aviation and logistics industries in Beijing and Chengdu which differ from the former models established in other major Chinese cities, like those in the Pearl River Delta and Yangtze River city-clusters.