Exchange Meeting on Cooperation between Port of and Malaysia

Deepen Cooperation and Exchange, and Hand in Hand for Win-win Development

Fuzhou Port Administration August 2019

Preface

Distinguished friends, Hello, everyone! It is my great honor to come to beautiful Malaysia to attend the fourth meeting of the Sino-Malaysian Port Union on behalf of Port of Fuzhou. Malaysia has maintained a close trade companionship with since ancient times. Since the signing of the Memorandum of Understanding on the Sino-Malaysian Port Union in November 2015, the two countries have responded positively to the Belt and Road Initiative so as to keep deepening the port exchange and cooperation. Last September, Governor Tang Dengjie of our province led the Fuzhou Port Group, a leading enterprise in Port of Fuzhou, and other companies to make a friendly visit to Malaysia and reached consensus on strengthening cooperation in & logistics and logistics. Port of Fuzhou has also signed the Memorandum of Understanding on the Establishment of Friendly Port Relations with Port Klang and Malacca Port, and the cooperation between both sides is getting ever closer. Today, relying on this excellent platform -- Sino- Malaysian Port Union meeting, I wish to exchange and address on the port cooperation between Port of Fuzhou and Malaysia.

I. Port Planning

I. Port Planning

II. Port Construction and Production

III. Opening of Routes and Exchanges and Cooperation

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

I. Port Planning

(1) Geographical location and logistics

Located in the southeast coastal region of China and the west coast of Strait, Port of Fuzhou serves as the main port and the important hub of regional integrated transportation in the coastal area of China. It is also the birthplace of the Marine and has a long history. It has a Chinese mainland coastline of 1,966 kilometers from the north bank of Xinghua Bay in the south to Shacheng Bay in the north and to Pingtan Island in the east, accounting for 52.4% of the province's 3,752 kilometers, which endows it with abundant coastal resources.

I. Port Planning

(1) Geographical location and transportation

The main port area of Port of Fuzhou is located on the north bank of Xinghua Bay and in Luoyuan Bay and Sandu Bay. Xinghua Bay is featured by deep water and broad estuary, thus creating a good harbor; Luoyuan Bay is surrounded by mountains on three sides and facing the sea on one side, with a narrow mouth, large belly and deep water; Sandu Bay has excellent conditions for harbor construction and abundant water, coastline and beach resources. In terms of land transportation, a perfect ground access system is formed, and the highways and railways to the port are connected to the national highway network and railway network. The highways to the port are connected with the nationwide highway network through national highways, provincial highways and Shenyang-Haikou Expressway. The railways to the port are connected to the national railway network through the Fuzhou- Mawei Branch Railway, Nanping-Fuzhou Railway, Hengfeng-Nanping Railway, Nanchang- Railway, Hangzhou-Shenzhen Railway, and Quzhou- Railway under construction, so that Port of Fuzhou covers a vast hinterland of China.

Shacheng Bay Port Area I. Port Planning

I. Port Planning Baima Port Area Port of Fuzhou is composed of "one

Sandu Bay port and eight areas": Pingtan Island Port Area Port Area, Jiangyin Port Area, Songxia Port Area, Minjiang River Estuary Port Luoyuan Bay Port Area, Luoyuan Bay Port Area, Sandu Bay Area Port Area, Baima Port Area and Shacheng Bay Port Area from south to north. About 160 kilometers of shore Minjiang River Estuary Port land and more than 350 berths are Area planned. The total throughput capacity of planned berths is 650 million tons. Songxia Port Area

Pingtan Jiangyin Island Port Area Port Area I. Port Planning -- Luoyuan Bay Port Area

Luoyuan Bay Port Area is a deep-water port area that mainly transfers bulk cargoes storage, and serves the development of port industries in the surrounding areas in Port of Fuzhou. There are five operation areas including Kemen, Dantou, Bili, Niukeng Bay and Jiangjunmao.

I. Port Planning -- Jiangyin Port Area

Jiangyin Port Area is a key developed comprehensive port area in Port of Fuzhou. It mainly specializes in the transportation of containers, coal, bulk cargoes and chemical products and combines the rolling transport of commercial vehicles. Three are two planned operation areas, including Bitou and Wan'an.

I. Port Planning -- Sandu Bay Port Area

Sandu Bay Port Area is an important industrial port area in Port of Fuzhou. It mainly serves the development of port industries in Sandu Bay and the regional development of northern , Eastern Jiangxi and southern Zhejiang, taking into account both urban material transportation and ship building & repair services. There are three planned operation areas of Chengao, Zhangwan and Xi'nan.

Zhangwan Operation Area II. Port Construction and Production

I. Port Planning

II. Port Construction and Production

III. Opening of Routes and Exchanges and Cooperation

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

II. Port Construction and Production

By the end of 2018, Port of Fuzhou has built 193 berths, with a total throughput capacity of 156.98 million tons (2.73 million TEUs for containers), including 60 above-10,000-ton berths, 26 above-50,000-ton berths and 18 above-100,000- ton berths.

II. Port Construction and Production

In recent years, the cargo handling capacity of Port of Fuzhou has increased year by year. The cargo handling capacity increased from 144 million tons in 2014 to 178 million tons in 2018, and the container handling capacity increased from 2.239 million TEUs in 2014 to 3.339 million TEUs in 2018. The container handling capacity increased more rapidly, up to more than 10% growth annually.

20000.0 333.9 350.0 300.8 17876.3 300.0 18000.0 268.1 10,000 10,000 tons 242.8 250.0 223.9 TEU 16000.0 14838.1 200.0 14391.2 14515.7 13967.2 14000.0 150.0

12000.0 100.0 2014 2015 2016 2017 2018 货物吞吐量Overall cargo 集装箱吞吐量Overall container handling handling capacity capacity II. Port Construction and Production -- Luoyuan Bay Port Area

Luoyuan Bay Port Area has built 13 berths, including 6 above-100,000-ton berths, available for berthing of maximum-300,000-ton bulk cargo ships, and the wharf throughput capacity as designed is 41.08 million tons. In 2018, Luoyuan Bay Port Area achieved a cargo handling capacity of 47 million tons, becoming one of the transfer and transportation hubs for bulk cargoes in China. At present, Luoyuan Bay Deep Water Channel Phase II Project is under preparation. Kemen Operation Area is verifying the berth capacity of 400,000-ton bulk cargo ships in 4-5# berths. In the future, the navigation capacity of the Channel and the berthing capacity of the wharf will be further enhanced to 400,000 tons. At present, many shorelines in Luoyuan Bay Port Area have not been developed and utilized (the red line part).

Kemen Operation Area

II. Port Construction and Production -- Jiangyin Port Area

Luoyuan Bay Port Area has built 17 berths, including 7 above-100,000-ton berths, available for berthing of maximum-150,000-ton containers, and the wharf throughput capacity as designed is 28.51 million tons (1.75 million TUEs for containers). In 2018, Jiangyin Port Area achieved a container handling capacity of 1.83 million TUEs, initially forming a pattern of continuous, intensive and large-scale development. At present, Jiangyin Port Area Approach Channel Phase III Project is about to be constructed. Bitou Operation Area is verifying the berthing capacity of 200,000- ton container ships in 4-5# berths. In the future, the navigation capacity of the Channel and the berthing capacity of the wharf will be further enhanced. Many shorelines in Jiangyin Port Area have not been developed and utilized (the red line part). II. Port Construction and Production -- Sandu Bay Port Area Sandu Bay Port Area has built 13 berths, including 2 above-10,000-ton berths, and the wharf throughput capacity as designed is 5.43 million tons. At present, Zhangwan Channel Project is under construction for the navigation of 150,000-ton bulk cargo ships, and Zhangwan Operation Area will construct many 150,000-ton berths in the future. Many shorelines in Sandu Bay Port Area have not been developed and utilized (the red line part).

Zhangwan Operation Area III. Opening of Routes and Exchanges and Cooperation

I. Overview of Port of Fuzhou

II. Port Construction and Production

III. Opening of Routes and Exchanges and Cooperation

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

III. Opening of Routes and Exchanges and Cooperation

The Port of Fuzhou has maintained trade contacts with ports from more than 40 countries and regions in the world, opening container shipment routes to Japan, Korea, Southeast Asia, West Africa and Western United States and cargo liner routes to domestic coastal ports. At present, Port of Fuzhou has opened 10 international routes, including one Eastern United States route, one West African route and eight Asian routes.

III. Opening of Routes and Exchanges and Cooperation

In the past three years, Port of Fuzhou has opened a number of new foreign trade container routes to the countries along the Maritime Silk Road, including two routes linked to Malaysia. One is the African Route linked to the Port of Tanjung Pelepas, and the other is the India-Pakistan Route linked to Port Klang. These two routes achieved a container handling capacity of 176,900 TUEs in 2018, of which about 182,000 TUEs were transported to and from or via Malaysia.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

I. Overview of Port of Fuzhou

II. Port Construction and Production

III. Opening of Routes and Exchanges and Cooperation

IV. Prospects and Suggestions for the Port Cooperation between Fuzhou Port and Malaysia

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

Since the first meeting of Sino-Malaysian Port Union in 2016, Port of Fuzhou has established friendly relations with Port Klang and Malacca Port successively. Under the strategic background of the Maritime Silk Road, Port of Fuzhou hopes to continue to strengthen exchanges and cooperation with Malaysian ports in all fields.

Visiting Port Klang Authority IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(1) Encouraging mutual capital investment between both sides Fuzhou's Work Plan for Building Maritime Fuzhou to Coordinate the National Strategy proposed to construct four hundred billion port industrial bases: Hundred Billion New Chemical Material Area in Jiangyin Industrial Zone, Kemen Hundred Billion Port Industrial Base on the South Bank of Luoyuan Bay, Hundred Billion Metallurgy and Building Materials Industrial Base on the North Bank of Luoyuan Bay and Hundred Billion Grain and Oil Processing Industrial Base around Songxia Port Area.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(1) Encouraging mutual capital investment between both sides

Luoyuan Bay Port Area has undergone rapid economic development with the practicing of port industries such as Kemen Huadian Power Plant, Baosteel Desheng, Yixin Iron & Steel, Huadong Shipyard, Shenhua Power Plant and SCC.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(1) Encouraging mutual capital investment between both sides Sandu Bay Port Area is also actively promoting investment, introducing projects such as Datang Power Plant, CHINALCO Smelting, Qingtuo Stainless Steel and New Energy Lithium Battery to build industrial bases of steel, metallurgy, electrical machinery and appliances, ship repair and building, etc.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(1) Encouraging mutual capital investment between both sides With regard to the Grain and Oil Processing Industry Base in Songxia Port Area, many grain and oil enterprises such as SINOGRAIN, Fujian grain reserves, Yuancheng bean industry, Yuanhong Flour, Yinfu Oil & Fat Industry, Kanghong Oil and Zhonghui Rice Industry have gathered around the port area, having initially formed a grain and oil distribution center and a grain and oil processing base.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia At present, the cargo handling capacity of Port of Fuzhou has exceeded the designed throughput capacity, and many coastlines have not been developed and utilized, so the demand of port transportation is very strong. Fuzhou is committed to building a cooperation platform for the countries along the Maritime Silk Road to carry out extensive cooperation with ASEAN countries in industrial parks, pelagic fishery and other fields. Port of Fuzhou hopes to further carry out pragmatic cooperation with Malaysian port enterprises for mutual development in infrastructure construction, industrial park construction and other fields, so that both sides can form benign investment interaction with complementary advantages, mutual benefit and win-win cooperation and continuously expand the scale of bilateral investment.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(2) Deepening cooperation between both sides and opening more routes

Malaysia has relatively developed electronic components and products and rich fishery resources. At present, Port of Fuzhou has two routes linked to Malaysian ports mainly for chemical products and bamboo and wood products. Next, Port of Fuzhou will continue to open silk road shipping routes. It will strive to open one or two new Southeast Asian routes in the second half of 2019 so as to guide port enterprises to serve silk road shipping routes with higher standards. It is hoped that both sides will deepen their industrial cooperation in sea products trading, ship building and repair and other fields under the guidance of sustainable development goals on the existing basis, and study and negotiate emerging industries, so as to provide sustainable competitiveness for future development and allow more and more cargo ships to have access to them.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(2) Deepening cooperation between both sides and opening more routes

Port of Fuzhou will strive to attract shipping companies to open more container shipment routes to Malaysia in Jiangyin Port Area, and also hopes that Malaysia will regard the Port of Fuzhou as an important partner in the southeast coastal region in China, so as to form an industrial chain cooperation relationship as far as possible, promote the optimization of trade structure, realize resource sharing between both sides and strength their interconnection. We hope to open more routes with Malaysia in the future, thus jointly promote the optimization of the port business environment, promote logistics cost reduction and efficiency improvement, and work together to build efficient, smooth and economical maritime logistics channels.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(3) Exploring port transformation and upgrading jointly

With the rapid development of ports and the emerging challenges such as energy saving and emission reduction, green ports and digital ports, port development is facing new industry challenges. We should strengthen exchanges and mutual learning, and jointly grasp the future development trends and opportunities of ports with green ports and smart ports as the focus. At present, Port of Fuzhou has actively promoted the clean transformation of shore power used by ships and port energy consumption, strengthened the prevention and control of port and ship pollution, applied new generation information technology, accelerated the transformation of fully automated wharf construction, improved the intelligent perception system and innovated the port logistics operation mode in accordance with the requirements of the Ministry of Transport for construction of green ports and smart ports.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(3) Exploring port transformation and upgrading jointly The development of Internet and modern information technology has promoted the network sharing and business innovation among ports, and accelerated the optimization, decomposition and integration of port industry chain system. Jiangyin Port Area has successfully launched 5G "smart port" platform with an intelligent tallying system, realizing unmanned and intelligent tallying. Port of Fuzhou is steadily advancing towards building a green and smart port. It is hoped that Port of Fuzhou and Malaysian ports will continue to enrich the port industry chain system, seek and create more value-added services, jointly build a new pattern of interactive development of port production, logistics, shipping, commerce & trade, finance and other supporting services, and promote the transformation of ports from traditional freight transport centers to diversified modern service centers.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(4) Strengthen business exchanges and personnel training Malaysia's port industry is relatively developed in Southeast Asia, and its port competitiveness and influence is constantly improving. Port of Fuzhou has also developed rapidly in recent years. Both sides have similarities and can learn from each other in the course of development.

This June, Port of Fuzhou and Johor Port Company signed a cooperation agreement on overseas training, which is an important step in the exchange between Port of Fuzhou and Malaysian ports.

IV. Prospects and Suggestions for the Port Cooperation between Port of Fuzhou and Malaysia

(4) Strengthen business exchanges and personnel training

In the future, we hope to, upholding the Silk Road spirit of learning from each other with Malaysian ports, further broaden the diversified communication channels for talents, strengthen learning and training and enhance cultural exchanges. We will organize and promote port administrators to carry out mutual learning and exchange of experience in terms of project research, port investment, human resources, wharf operations and security management.

Conclusion

Finally, I sincerely invite Malaysian port colleagues to visit Port of Fuzhou for investigation and exchanges. Let us stand in the new historical position of the Belt and Road

Initiative and join hands with Malaysian ports to write a new chapter of the Maritime Silk Road.