Economic Watch: China enhances logistics, manufacturing synergy to support 'dual circulation'

Updated: September 22, 2020 Source:
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China is looking to enhance the efficiency of its logistics industry and promote its integration with the manufacturing sector under efforts to support the dual circulation development pattern.

"A modern and efficient logistics system would be conducive to balancing supply and demand, improving industrial competitiveness, raising economic efficiency and fostering high-quality development," said Wu Chungeng, an official with the Ministry of Transport.

Noting that the logistics system plays a fundamental role in the national economy, Chinese leaders stressed the importance of developing a modern logistics system at the eighth meeting of the Central Committee for Financial and Economic Affairs on Sept. 9.

Also in September, 14 central government departments announced an action plan to drive integration and innovation among the logistics and manufacturing sectors, and to maintain the stability of industrial and supply chains.

The moves come as China attempts to form a new development pattern known as dual circulation, which takes the domestic market as the mainstay while allowing domestic and foreign markets to boost one another.


As China is transitioning from a phase of rapid development to a stage of high-quality development, a well-developed logistics system is urgently needed to help create a strong domestic market and build a modern economic system, experts said.

The country's logistics industry has achieved rapid expansion over the past four decades. The raging COVID-19 pandemic, however, has exposed problems such as an insufficient logistics supply, a lack of personalized services and a dearth of synergy between the logistics and manufacturing sectors.

For some companies, the biggest headache has been the increase in transportation costs. A manager at Bloomage Biotechnology Corp., a producer and exporter of sodium hyaluronate, said that transportation costs have surged in recent months due to reduced air freight capacity and soaring rates.

"A modern logistics system is an important carrier connecting consumers and producers. Amid the unexpected pandemic, more and more enterprises have realized that the smooth flow of goods is essential to business success," Wu said.


To further lower transportation costs for the manufacturing industry and to facilitate its upgrading, industry insiders said that logistics companies should improve their services by means such as introducing one-stop solutions for different shipment needs.

"The manufacturing industry is comprised of various sub-sectors, and requires logistics firms to provide personalized services to cater to different needs," said logistics expert Xu Yong.

Shi Lei, director of the center for public economy research at Fudan University, said that the industrial internet will likely play a key role in promoting the integration of the logistics and manufacturing sectors.

The use of intelligent technology and data matching techniques will help manufacturers find logistics and delivery service providers efficiently, thus reducing the delay of goods in the circulation process, Shi said.

To increase synergy between the manufacturing and logistics industries, more efforts are needed to boost infrastructure development, promote information application and big data development in the logistics field, develop smart logistics and distribution, drive innovation in the supply chain, and improve standards and the regulatory system, experts said.

Editor: 于慧宸