[ COSCO “Ready”to Face Challenges Under WTO ]

China Ocean Shipping Co. (COSCO), which controls about 70 percent of t
he nation’s cargo carrying capacity, says it can meet the challenges
which China’s expected World Trade Organization (WTO) entry will brin
g. And while less efficient carriers may drown under the force of mark
et competition, a COSCO official said WTO membership will greatly stim
ulate China’s foreign trade and fuel changes in the domestic shipping
industry.
China’s foreign trade cargo is projected to reach 656 million tons in
2005, up substantially from 383 million tons in 1998. “It’s a golde
n chance for home carriers,” he said.
An increase in the volume of freight handled by domestic ports will al
so promote COSCO’s overseas ship agency business. With more than 1500
agents across the world, COSCO will take advantage of its broad busin
ess network to provide better services for clients, the official said.
However, China’s WTO entry will also mean fiercer competition from ab
road for domestic shippers, he said. The hardest hit will be the near-
monopolistic ship agency sector, which will have to be opened to forei
gn competition as part of the WTO deal. He said the company will try t
o improve its after-sales service, currently a weak point. COSCO is al
so upgrading its information technology and e-commerce service. Anothe
r problem which may arise from the arrival of foreign companies could
be a “brain drain”of top employees. To tackle the problem, COSCO, wh
ich employs more than 80,000 people, will focus on human resources in
the future, the official said.