China's burgeoning warehousing logistics industry, which is to be fully opened up next year, offers huge opportunities for overseas investors.

And to make the proposition even more attractive, the Chinese Government is making efforts to improve the investment environment.

Speaking at the International Federation of Warehousing Logistics Associations (IFWLA) Annual Convention 2005, Fu Ziying, minister assistant with Ministry of Commerce, told delegates that China's warehousing logistics market is only in its infancy. Investment at this early stage could offer firms a handsome return, he added.

The convention opened on Monday in Beijing and closed yesterday in Shanghai.

According to official statistics, the combined value of China's logistics industry amounted to 38.4 trillion yuan (US$4.63 trillion) last year, up 29.9 per cent from 2003.

Meanwhile, freight capacity totalled 16.1 billion tons, an increase of 10.6 per cent compared to 2003. Freight turnover climbed 23.8 per cent to 66.7 trillion ton kilometres in 2004.

"China's economic boom will definitely stimulate warehousing logistics demands, especially considering the brisk surge of foreign trade amid market internalization around the world," said Fu.

In line with China's commitments to the World Trade Organization, the sector will be fully liberalized in 2006. Sino-foreign warehousing logistics joint ventures, with Chinese sides holding the controlling stakes, have been permitted since the 1990s. Since last year foreigners have been allowed to hold up to a 75 per cent stake.

"The progress of the modern warehousing logistics industry involves a string of related sectors, such as customs, transportation and foreign trade," said Xu Wencai, the current president of the IFWLA.

In addition to the Ministry of Commerce, the nation's Customs General Administration and the Ministry of Communications are also taking measures to create a favorable environment for logistics investors.

The Customs General Administration has established a risk control mechanism, strengthened logistics information supervision and reformed bonded logistics supervision.

To meet the requirements of modern warehousing logistics, the Ministry of Communications is collecting suggestions from insiders and experts to optimize the transportation system structure, upgrading facilities and introducing world leading technologies.

Joel R. Hoiland, president of the International Warehousing Logistics Association of the United States, pointed out that China, as the "most exciting and important market in the world, deserves the attention of any business".

Zhang Bin, president of Sinotrans Head Corporation, believes that the entry of multinationals into the logistics market will contribute greatly to the industry. Sinotrans, which formally held a monopoly on China's warehousing logistic market, has recently set up partnerships with a group of foreign firms, including OCS, DHL and UPS.

"Those collaborations have helped us hold on to our dominant position as powerful rivals enter the market," said Zhang.