China formally established a new state-owned logistics group on Monday, state broadcaster CCTV reported on Monday, to strengthen domestic and global supply chains amid widespread disruptions caused by the pandemic.
China Logistics Group aimed to become a “global supply chain organizer" by developing international trade links and freight services, as well as cross-border e-commerce, CCTV said.
The new company was formed through a merger of China Railway Materials, China National Materials Storage and Transportation Group, Huamao International Freight Limited Company Shenzhen Branch, China Logistics, and China National Packaging Corporation, CCTV said.
The merger comes at a time when the pandemic continues to disrupt global supply chains, especially in Chinese ports, where even one positive COVID-19 case can result in operations being suspended.
The newly-formed group will also include as strategic investors the parent firms of China Eastern Airlines , COSCO Shipping, and China Merchants Group, who will respectively hold share percentages of 10%, 7.3%, and 4.9%.
China's State-owned Assets Supervision and Administration Commission (SASAC) and China Chengtong Holdings Group will evenly split the remaining shares. Chengtong Holding is centrally-managed by SASAC, giving the state asset regulator control over all the remaining shares.
The new state-owned logistics giant currently covers 30 Chinese provinces, has a presence in five continents, and operates 3 million vehicles, CCTV said.
(Reporting by Eduardo Baptista; Editing by Richard Pullin and Simon Cameron-Moore)