China takes more measures to reduce logistics costs

China is set to reduce logistics costs and improve logistics efficiency to spur the real economy, according to a guideline approved at a State Council executive meeting chaired by Premier Li Keqiang on Wednesday.

One focus is placed on better road transportation through improving traffic administration and law enforcement to enable better services and less red tape. Tax policy will be overhauled and toll charges will be set at reasonable levels to reduce the burden on companies.

"The logistics sector is the groundwork of strategic importance for the development of market economy. Lowering logistics costs and raising the efficiency should be prioritized this year," Li said.

Statistics from the National Development and Reform Commission showed that the cost of logistics in China took up about 14.9 percent of the GDP in 2016, down by 1.1 percentage points from the previous year.

Although the ratio had dropped for four years in a row by 2016, it is not only significantly higher than some developed economies, but also higher than some developing economies.

China is ranked 27th in the 2016 Logistics Performance Index created by the World Bank and covering 160 countries and regions.

"China's logistics costs are still on the higher end in the world. We should promptly respond to the shared concern of businesses with well-designed measures to make the sector travel light and perform better. That will be of great help to the real economy," he said.

According to the guideline, support will be provided in terms of urban planning and land use. A number of logistics centers at national level will be developed. Logistics infrastructure will be reinforced, and rail freight service improved and integrated with other means of transportation.

More means of financing will also be made available to companies in the logistics sector.

The country aims to establish an integrated nationwide cargo clearance system and to cut cargo clearance time by one-third by the end of this year, according to the guideline.

The logistics sector will benefit from greater integration with the manufacturing sector, while more efforts will go to core technology and equipment development and management upgrading.

The government will actively press ahead with the reform agenda to break regional protectionism and industry monopoly.

"We must take actions to drive China's logistics costs toward the lower end among developing countries," the premier said.