Considering the current statistics, China can be contemplated as the largest economy accompanying a GDP value of more than USD 11 trillion. Supporting in line is the evidence that the Chinese population is considered to be of upper middle class with per capita income of about USD 13,170 (PPP) per year. However, it is not to undermine the fact about unemployment which has been held steady at 4.7 percent with a less than 1 percent rate of inflation since 2014. Therefore, it is to say that China’s economy is currently undergoing a rapid transition, from being a manufacturing and construction led economy to a consumer led economy.
Cold chain logistics can be defined as an uninterrupted series of refrigerated collection, processing, packaging, storage, transportation and distribution activities with associated equipment which maintains a given low-temperature range to preserve and extend the life of products, ensuring the quality of perishable products. With the evident improving economy, growing household incomes, there has been an inflating demand with regard to safety; health and quality of life which in turn is highly benefiting the Chinese cold chain market with a growth over 20% p.a. over the past five years. The growth has been further aided due to the increasing concerns regarding food and drug safety, especially with the increasing popularity of purchasing fresh produce online. The cold chain logistics lays the foundation for supplying perishable products (fresh fruits and vegetables, meat, dairy, aquaculture products, fresh flowers fresh fruits and vegetables, meat, dairy, aquaculture products, and fresh flowers) and medical products (drugs, reagents, vaccines, biological products), requiring certain strict temperature, humidity and environmental conditions. In addition, these temperature-controlled products require a series of steps to move along the cold chain which can be broken down into the segments of warehousing, ground transportation, air transport, distribution, infrastructure providers (equipment, systems, basic services etc.), and third-party logistics service providers (3PL).
In terms of tax policies, in June 2016, Ministry of Finance and Ministry of Commerce jointly issued Notice on Central Finance’s Support for the Development of Cold Chain Logistics, says Ken Research. According to the notice declared, the 10 demonstration regions which received financial support included Shandong, Henan and Chongqing amongst the remaining others. All inclusive of these facts, the Chinese government has been in support of the development of cold chain logistics industry.
However, despite of taking a leading position in the agricultural and animal products supply market, there still prevail significant losses of quantity as well as quality before the products even reach the consumers due to a shortage in the chill-facilities and the major cold chain systems. Also, there are numerous consumers purchasing the agriculture and food products from a traditional wet market, which is further limiting the full utilization of the cold chain systems. Therefore, in order to overcome the often occurring serious food incidents, an impetus to the growth of cold chain market has been provided. In support, the major cities of Beijing and Shanghai have also been witnessing dramatic growth pattern in the utilization of cold chain warehouse and transportation systems. Moreover, as the western businesses and cultural influences become increasingly popular and the consumers are becoming more aware and educated pertaining to the food safety issues, the market improves on the standard of flourishing not only in China, but also as a supplier at the global level, aided with technology, equipment and a booming market. For example, Agility Fairs & Events was the only sole provider of cold chain logistics during the 6-month period of World Expo that took place in Shanghai, China in 2010. As the Official Logistics Services Provider of World Expo 2010, it provided a full range of transportation and storage services at the event, which exhibited over 200 countries and organizations.
The other leading key players operating within the Cold Chain Logistics market in China include Zhejiang Dong Ri Limited Company, Dalian Tianbao Green Foods Co., Ltd., China Railway Express Co., Ltd., Luohe Shuanghui Logistics Investment Co., Ltd., Henan Xianyi Supply Chain Co., Ltd., Shanghai Speed Fresh Logistics Co., Ltd., Shanghai Zhengming Logistics Co., Ltd., DCH Logistics Company Ltd., HAVI Logistics (Beijing) Co., Ltd., China Merchants Americold (Hong Kong) Holdings Co., Ltd. , Rokin Logistics and Supply Chain Co., Ltd., Shanghai Jiaorong Cold-Chain Logistics Co., Ltd., Sinotrans Shanghai Cold chain logistics Co., Ltd., Jiangsu Yurun Agricultural Products Logistics Group Co., Ltd., Nanjing Runheng Logistics Development Co., Ltd., Qingdao Dafu Rongsheng Frozen Logistics Co., Ltd., Shanghai Grand logistics Co., Ltd., Jiangsu Tianyuan Logistics Group Co., Ltd., Chengdu SilverPlow Refrigeration Logistics Co.,Ltd., CCL Cold Logistics Corp.,Ltd., Dalian Refrigeration Co., Ltd., Fujian Snowman Co., Ltd., Shanghai Hanbell Precise Machinery Co., Ltd., Nantong Square Cold Chain Equipment Co., Ltd., Luoyang Longhua Heat Transfer & Energy Conservation Co., Ltd., Shandong Wanze Cold Chain Co., Ltd., and Zhejiang Kaishan Compressor Co., Ltd. These players are responsible for not only the distribution of products within the country but also in the global sphere, in a fattening way.