Shanghai's Yangshan Port

The deve-lopment of Shanghai's Yangshan Port (pictured) was reportedly due to the support of former Chinese President Jiang Zemin in the early 2000s, at "a time when the "Shanghai Gang's" influence in Beijing was paramount."

The port is located north of the Hangzhou Bay area, and its development is linked to the desire to regain Shanghai's previous global shipping hub status.

"However, Shanghai's grand ambition to become China's premier shipping hub was being constrained by the physical conditions surrounding Huangpu River. Huangpu River is not only narrow but shallow, with a depth of only seven meters. Big vessels often have to wait for up-tides to enter and leave the Port." (Yang Mu & Lionel Ho, Shanghai's Mega Port in Yangshan, in Interpreting China's Development, Ed. Wang Gungwu and John Wong, World Scientific Publishing, 2007).

Hence, the construction of a mega deep water port is said to be "of paramount importance" to Shanghai in serving its long-term needs. So after six years of feasibility studies and lobbying, the Yangshan Deep Water Port Project was formally approved by the central government in 2005.

The Port had reportedly led to major industry shakeups in Northeast Asia.

It has upset Busan's plan to be the prime logistics hub in Northeast Asia, while Kaohsiung Port - once the third busiest container port globally - is increasingly losing its trans-shipment status in the Asia-Pacific region.

"It is also likely to thwart Kobe's ambition to become Asia's leading port. On a negative note, intense competition among Asian ports has raised concerns over an oversupply of cargo handling capacity coming on line. Indeed, industry players are already forecasting a dip in charges in certain ports in the near future," Yang and Ho wrote.

As for Hong Kong, the impact on the SAR "will not be detrimental" as the territory depends largely on shipments within southern China, especially the Pearl River Delta region.

The development of Yangshan Port has also led to cooperation between the ports of Ningbo and Zhoushan. The two plan to invest RMB 10 billion to build a 12-berth facility in Zhoushan. Construction began in 2008, and the first two berths are due for commissioning in 2010.

Shanghai may be ambitions, but it faces competition from other Chinese regions such as Guangdong and Beijing-Tianjin.

"With the retirement of Jiang Zemin, the "Shanghai Gang" was slowly losing political clout. It was unsure if the new Hu-Wen administration would continue to channel resources ... to support Shanghai or divert resources to regions that are needier or politically in vogue."