Transport curbs ripple out from Beijing
BEIJING (Reuters) - The transport restrictions that China is imposing as part of its drive to ensure clean air and security for the Olympics are rippling well beyond Beijing, ensnaring a widening circle of companies.
Private cars may take to the city's roads only every other day, depending on whether their license plates are odd or even. Most trucks can enter the city only at night, and only if they meet tough emissions standards.
On top of that, a range of goods deemed dangerous, including most liquids and even electronics, cannot be shipped by post, nationwide.
Such measures, not the separate moves to shut polluting factories in and around the capital, are why the Beijing plant of China's top biodiesel producer now sits idle among the corn fields on the sleepy southern outskirts of town.
"The government's recent strict enforcement of measures controlling the movement of vehicles and goods in and out of the Beijing area have rendered biodiesel production at our Beijing plant impractical for the time being," said Yu Jianqiu, chairman of Gushan Environmental Energy Ltd
The plant will be shut until September 20, making about 10,000 fewer tonnes of biodiesel as a result, it said.
Evidence is mounting that many other companies are getting caught in the crossfire as well.
Hyundai Motor Co's Beijing joint venture will face disruptions for two months because of the difficulty of getting auto parts shipped in, meaning around 50,000 fewer vehicles will be made there, South Korea's Maeil Business Newspaper reported last week.
Hyundai officials were not available for comment.
Beijing firms are not the only ones affected.
A survey of manufacturers published by brokerage CLSA last week showed that many factories around China were having to wait longer for raw materials due to the transport curbs, pushing up costs for some.
Zhejiang Adwin Furniture, based in Wenzhou, a hive of enterprise in eastern Zhejiang province, stopped shipping its furniture to Beijing and the northeast of the country as early as June, said executive Liu Yongcheng.
Heavy trucks arriving from the south are being turned back as far away as Dezhou, Shandong province, nearly 300 km (185 miles) from central Beijing, explained Yang Xinlei, a senior executive at Gtime Logistics Co Ltd in Beijing.
HEARTBURN, NOT HEART ATTACK
Such restrictions have presented an Olympic-sized challenge for major logistics firms.
Dan McHugh, chief executive of Deutsche Post's DHL Express Asia Pacific, said his company started working 18 months ago on plans to deal with the curbs.
DHL has spent about $2 million to prepare for the Games, buying extra x-ray machines and hiring more staff to handle the additional nationwide customs checks, McHugh told Reuters.
"The key thing is the amount of inspections that they're both mandating and asking for," he said.
Ben Simpfendorfer, a China strategist with Royal Bank of Scotland in Hong Kong, said that while the measures would not slow overall economic growth by much, the resulting headaches are greater than many expected.
"A lot of these companies are struggling with cashflow anyway, so when you start to see disruptions in the transport and distribution network, it does begin to cause problems -- it has a ripple effect," Simpfendorfer said. "But it's more likely heartburn than a heart attack."
That is little consolation to the workers at Gushan's biodiesel factory outside Beijing.
"Of course we don't like to see our factory halt production," said one worker, sitting beneath one of the few trees lining the deserted road in front of the factory.
But that would not mean he and his colleagues would have the summer off to watch the Olympics, said the man, who declined to give his name for fear of getting into trouble with his employer. They would have to go through training and indoctrination in company culture over the coming weeks.
"Once the Olympics are over, things will be better for us," he said.
(Additional reporting by Langi Chiang; Editing by Alan Wheatley and Mathew Veedon)
