Kaohsiung, Shanghai ports race for liberalization
CNATAIPEI -- A race is brewing between the Taiwanese port city of Kaohsiung and China's Shanghai for liberalization, as a plan to prepare Shanghai for international metal trading has come on the heels of news that Kaohsiung will serve as a delivery point for a leading London exchange.
September 17, 2013, 12:08 am TWN
In mid-June, London Metal Exchange (LME) announced that it had approved Kaohsiung as its ninth delivery location in Asia, making it the first port on either side of the Taiwan Strait to be certified by LME as a delivery point.
Kaohsiung, which houses a free trade zone, will begin handling various metals for futures trading by the end of November, outpacing a similar development in Shanghai, where a pilot free trade zone is sited, according to the Taiwan International Ports Corp.
China's Ministry of Commerce suggested in August the development of the Shanghai free trade zone into a delivery point for overseas commodity futures dealers, prompting speculation in the Chinese media about the possible role the London exchange will play in the blueprint.
Charles Li, chief executive officer of HKEx Group, which owns LME, has said it would be “most ideal” for the London dealer to have certified warehouses in China. The LME does not own or operate warehouses but simply authorizes warehouses to store LME-registered brands of metal.
Some are concerned that the development of Shanghai into an LME delivery point could hurt the edge Taiwan enjoys in logistics and warehousing.
Yeh Hui-te, head of an association of Taiwanese businessmen operating in Shanghai, however, acknowledged the advantages Taiwan enjoys — a more mature market, sound laws and regulations and administrative efficiency — saying that Taiwan's own efforts will be crucial in the competition with China.