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Study on System Application and Efficiency Analysis of China E-Port Yiqun Li, Qing Nie, Xuezheng Zhang Journal

of Convergence Information Technology, Volume 6, Number 2. February 2011

Study on System Application and Efficiency Analysis of China E-Port


Yiqun Li, 2Qing Nie, 3Xuezheng Zhang Shanghai Institute of Foreign Trade, liyq@shift.edu.cn 2 Shanghai Institute of Foreign Trade, nieqing@shift.edu.cn 3 Shanghai Institute of Foreign Trade, zxz@shift.edu.cn
*1 1

doi:10.4156/jcit.vol6. issue2.6

Abstract
With a sustainable development of export-oriented economy in China, the overall size of port logistics is continuously expanded. Based on the developing trend and characteristics of port logistics in China, the significance and advantages of China E-port are analyzed. Meanwhile, the data center and some main application systems of China E-port are introduced in this paper as well, such as Manifest, ATA, Customs Agency, Online Payment, E-account book, and Identity Authentication. Finally, it is proposed that the main feature of E-port system is information sharing which is significant on improving the whole efficiency of port logistics compared with major projects in China E-port. It is especially analyzed how to improve the economic effectiveness and social benefits of local international logistics informationization since the implementation of Shanghai e-port, such as strengthening the customs supervision, speeding up the flow of imports and exports, expanding the scope of Shanghai logistics center, etc. Some measures are proposed to further expand the value of Shanghai e-port system, including the port innovative model, and other regional collaboration strategies.

Keywords: China E-port, E-customs Declaration System, Customs Efficiency 1. Introduction


The rapid development of port logistics can promote an effective convergence of logistics, business flow, and information flow in import and export trade and enhance China's foreign economic competitiveness. Combined with traditional port, aviation and highways, the modern logistics industry strengthens port service which transits from distribution-based and transferred mode to an integrated service-platform. A number of logistics centers, distribution centers and logistics specialists with modern ideas and facilities will gather in the port area, further expand port logistics operations and improve port logistics integrated coordination. Port logistics refers to the integrated logistics, which takes use of the advantages of port cargo distribution to provide logistics services with advanced infrastructure and equipments to support the import and export trade and entrepot trade. As a goal of optimizing logistics resource integration, the modern information technology serves port logistics to strengthen port peripheral functions and radiation patterns. The growing volume of foreign trade promotes the rapid development of China's port logistics which has become an indispensable part of modern logistics. Port logistics involve a set of logistics processing, such as container transportation, warehouse distribution, circulation processing, port clearance, and other value-added services which are all important processes in import and export trade. China E-Port is a data-exchanging platform, which based on the national public internet, involves Ministries of Industry and Commerce, Ministries of Taxation, Customs, Administrations of Foreign Exchange, Ministries of Foreign Trade, Bureaus of Quality and Technical Supervision and Quarantine, Banks, import and export enterprises, processing trade enterprises, intermediary companies of foreign trade and consignor companies of foreign, stores the data of information flow, goods flow and funds flow in a centralized database, realizes the trans-departmental, trans-regional and trans-industrial networking verification and data-exchanging for the nationwide administrative departments of all levels and provides enterprises the real-time online service such as Customs clearance, foreign exchange affairs, drawback , payment and so on. [1]

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Study on System Application and Efficiency Analysis of China E-Port Yiqun Li, Qing Nie, Xuezheng Zhang Journal of Convergence Information Technology, Volume 6, Number 2. February 2011

2. China E-port Development


With the approval of the State Council in 2000, General Administration of Customs launched the project of China E-Port in conjunction with the Ministry of Public Security, Ministry of Railways, Ministry of Communications, Ministry of Information Industry, Ministry of Commerce, Peoples Bank of China, State Ministry of Taxation, State Ministry of Industry and Commerce, State Bureau of Quality and Technical Supervision and Quarantine, General Administration of Civil Aviation, State Administration of Foreign Exchange 12 ministries and administrations in total. At present, China EPort has realized information-exchanging and sharing with General Administration of Customs, State Administration of Foreign Exchange, State Ministry of Taxation, State Ministry of Industry and Commerce, Ministry of Commerce, Ministry of Public Security, Ministry of Railways, China Council for the Promotion of International Trade. Trade and Industry Department of Hong Kong, Economy Bureau of Macau and other 11 banks, including Bank of China, Industry and Commercial Bank of China, Agricultural Bank of China, Bank of Communications, China Merchants Bank. The enterprise users are about 180.000 with daily e-bills and documents more than 500.000 and daily click rate more than 4.300.000 times. The system runs steadily. Currently, 52 application projects have been finished or under construction, 22 of them are nationwide promotion projects such as Networking Verification of Import Payment Clearance Documents, Verification of Export Foreign Exchange Collection, Networking Verification of Import Increment Tax, Customs Declaration, Export Drawback, Clearance Document, Online Payment etc.; 9 regional promotion projects such as Faster Clearance of Shenzhen Landway Port, Verification of CEPA Origin Certificate, Shenzhen E-Port etc.; 7 pilot projects such as Logistics System of Guangzhou Baiyun Airport, Quickpass Version of Customs Agency etc., another 14 are under construction such as Security and Exchange System, Distributed CA System etc, in Figure 1. [2]

D/O D/O Inspection

Customs

Inspection

Customs

CY/CFS CY/CFS Tally Tally Loading

Loading

Operative Plan

Operative Plan

Delivery

Delivery Figure 1. The transformation of E-port businesses The China E-Port owns obvious advantages compared with present mode of port management.

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Study on System Application and Efficiency Analysis of China E-Port Yiqun Li, Qing Nie, Xuezheng Zhang Journal of Convergence Information Technology, Volume 6, Number 2. February 2011

(1) Information-sharing. The enterprises can apply or declare for various kinds of export and import formalities through China E-Port to the ministries of Customs, Quality and Technical Supervision and Quarantine, Foreign Trade, Foreign Exchange, Industry and Commerce, Tax, Bank etc. and the online approval formalities are all available to the governments of all levels, thus truly realizes the governments One Stop Service to the enterprises. Through the data center, the enterprises also can enjoy intermediary service of transportation, storage, banks, insurance etc., thus realizes the real ebusiness. (2) All-weather and all-round service. The enterprises can visit the data center and transact business though data center by a local telephone to connect with INTERNET at any places and any time. (3) Low cost. The enterprises only need some simple equipment to log on the website of China EPort and the data center provides software for free so that much cheaper than EDI. (4) Easy learning and operating. China E-Port regards Windows operating system as the platform, IE as browsing tool, setting up an interactive interface with the users. The system offers a series of abundant online guides, business norms, operation manual, which truly realizes the network office. (5) Strong safety precautions. China E-Port adopts the international standard and domestic selfdeveloped high-strength code design and multiple rigorous safeguards on enciphered network communications, network isolation, computer room facilities, identify authentication, jurisdiction setup and digital signature etc., anti-hacker, anti-virus, anti-peep and anti-disavowal. The system is directly under control and supervision of the government so that the security can be guaranteed.

3. China E-port Infrastructure


In accordance with the planning and design, China E-port is set up a customs management model to perform clearly the entire management of electronic customs clearance procedures and content. The following are two examples of some main systems to illustrate the main points of the e-port structure and functions.

3.1. Manifest Declaration System


Manifest Declaration System (the version of Customs agency) is a sub-system of the Customs agency version of Customs declaration system, which based on the centralized manifest dataexchanging-platform of China E-Port with the function of strict identity authentication and digital signature, takes use of the unified manifest pre-input and pre-declaration interface, strengthens the quality control of the manifest data to guarantee the veracity, validity and legality. The application objects involve imports and exports enterprises, Customs agencies and Customs. The bills and documents involve manifest and bill of allocating. The manifest declaration system (the version of customs agency) targeted on the management of manifest and bill of allocating. It also provides the assistant functions as manifest revision, query, print, stat. and return receipt query, including the manifest declaration transaction of air, sea, mail, railway transportation as well as small-scale watercrafts. The H2000/EDI Customs Declaration System is the typical E-port application. The customs declaration system was adopted as the first application of computer in government departments from 1978. In 1982 Shanghai and Guangzhou customs introduced DEC's PDP 11/70 computer to deal with the single pilot operation. To achieve the national customs networking and the integrated management among relative departments, the General Administration of Customs started developing a new generation of customs management system - H2000 in1996. Until December 2000, the Beta version of the system was completed and launched in 2003. H2000 system is divided into three levels: the data layer, the business logic layer and the user interface layer, as shown in Figure 2. The data layer is located in general and sub-department information center, which involves all kinds of databases. The business logic layer is located in the general information center, in which all of the various operations are conducted through customs declaration processes. The user interface layer, which also can be called as the presentation layer and can not directly access the database layer, deals with the operations in accordance with the declaration of all flow to the customs officer and to display all kinds of business data, and send customs operations to the logic layer.

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Study on System Application and Efficiency Analysis of China E-Port Yiqun Li, Qing Nie, Xuezheng Zhang Journal of Convergence Information Technology, Volume 6, Number 2. February 2011

User Interface Layer

Web

Business Logic Layer

Com+
Load Balance

Data Layer

15 Databases

Figure 2. The infrastructure of H2000 system

3.2. Payment Platform


As a supporting project of China E-Port, Online Payment System has linked with other operation systems of China E-Port as well as internal systems of the banks, which changes the modes of payment and provides the clients veracious, convenient and rapid online financial service. The clients are able to transfer taxes from their accounts through INTERNET and then go through relevant formalities directly. The Online Payment System will shorten the time of clearance, improve efficiency and reduce the trade cost. The subsystem of Bank of China of Online Payment System is developed cooperatively by Customs and Bank of China. The e-port payment system provides users with rich functionality and various types of payment, which meet the import and export business users to pay customs taxes online and administrative fees required, but also facilitate users to pay the customs costs to other port agencies. At the same time, it also provides users with a convenient, fast and efficient tax and fee, billing and other declarations information and inquiry service as shown in Figure 3. This system mainly includes the following four functions: 1) synchronous information of tax and fee 2) paying business of customs tax and fee 3) printing the bill of tax and fee payment 4) checking the payment summary information. The payment business of customs taxes and fees are divided into 2 broad categories: pre-paid and post-paid. Both of payment businesses include online paying and printing tax bills. Although the online clearance deal is not yet fully realized, the partly electronic payments avoid the inspection process of the cash and greatly improve the payment efficiency. The users can search through the platform and pay the tax and fee, including import and export tariffs, specific tariffs, specific value-added tax, antidumping duty, import VAT, customs duties and the interest rates ease, consumer income tax relief, VAT relief, margins, regulatory fees, fee for delayed declaration, late fees, import consumption tax, etc. User Customs Payment Platform

Customs Declaration

Tax and Fee Generation

Tax and Fee Modification

Input

Tax and Fee

Update

Figure 3. The synchronous information of customs tax and fee

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Study on System Application and Efficiency Analysis of China E-Port Yiqun Li, Qing Nie, Xuezheng Zhang Journal of Convergence Information Technology, Volume 6, Number 2. February 2011

3.3. Information Data Center


With the official approval of the Chinas State Organs Establishments Committee, the China General Customs Administration established a subordinate organization of independent legal personality --China E-Port Information Data Center in May. 2001. China E-Port Information Data Center is mainly responsible for the system integration, network platform establishment, program exploitation and system maintenance of the The Tenth Five-year Science and Technology Program Gold Customs China E-Port and provides e-government affairs service for governments of all levels and more than 5 million import and export enterprises. Undertaking its demand-oriented, application-minded working guides since its establishment, Data Center has always focused on the national key pilot projects as shown in Figure 4. [3]

Figure 4. The Infrastructure of China E-port Information Data Center Presently, 31 e-port application programs have been promoting in nation wide and 47 provincial capitals, cities under direct planning by the state, 300 prefecture-level cities have set up China E-port dedicated access. The projects involves China Customs, Administrations of Foreign Exchange, Ministries of Taxation, Administrations of Quality Supervision, Inspection and Quarantine, ministry of commerce, Ministry of Public Security, Ministry of Railways, China Council for the Promotion of International Trade, Trade and Industry Department of HongKong, Macao Economy Bureau and other 11 banks, including Bank of China, Industry and Commercial Bank of China, Agricultural Bank of China, Bank of Communications, China Merchants Bank. The enterprise users of the China E-Port are about 180.000 with daily e-bills and documents more than 500.000 and daily click rate more than 4.300.000 times. The project receives remarkable social and economic benefits on rectifying the national economic order, strengthening the governments integrated management and facilitating the Customs Clearance. With its 323 working staff, among whom are 6 doctors, 76 masters and a great many of IT talents as well as 5 departments- Central Office, Technology Department, Operating Department, Client Service Department and Finance Department, Data Center has always dedicating to transferring scientific and technological achievements into practical productive forces, serving for national export-oriented economic development, putting central governments establishment of E-Port into effect, guaranteeing the needs of Port Law Enforcement System. In order to ensure the systematic normal running of Eport, Chinas State Organs Establishments Committee approved to set up branches of Information Data Center at 41 locations directly under local Customs.

4. Significances of E-port in Shanghai


The implementation of Shanghai e-port can be significant for promoting the development of Shanghai international trade and international logistics center mainly from the following some perspectives. First of all, E-Port helps to strengthen the comprehensive management efficiency of the

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Study on System Application and Efficiency Analysis of China E-Port Yiqun Li, Qing Nie, Xuezheng Zhang Journal of Convergence Information Technology, Volume 6, Number 2. February 2011

administrative departments. The enterprises can apply or declare for various kinds of export and import formalities to the ministries of Customs, Quality and Technical Supervision and Quarantine, Foreign Trade, Foreign Exchange, Industry and Commerce, Tax, Bank etc., thus truly realizes the governments One Stop Service to the enterprises. Secondly, E-Port betters the import and export control of the management departments. The new management mode of e-account book + online verification fundamentally puts an end to the falsification of the operation bills and documents, sternly cracks down on smuggle, committing foreign currency fraud, cheating on tax and other illegal activities, creates fair competitive market environment. Thirdly, E-Port reduces the trade cost and improves trade efficiency. It not only helps the enterprises to save time and manpower but also reduces the trade cost and improves trade efficiency. E-Port is one of the most significant symbols of trade modernization drive and a crucial way to improve the administrative transparency of law enforcement departments. [4]

4.1. Economic Benefit


As known as economic data to measure the development of international trade are the best target. The economic growth figures perform as the trends and the extent, and their interrelations. As shown in Figure 5, before 2000, the capacity Shanghai port seemed reaching at a saturation point. After 2001 of the implementation of e-port, the container and cargo throughput of Shanghai sea ports kept increasing at the high growing rate. With the e-port system, the Waigaoqiao 4-5th stage and the 1-2 stage plan of the Yangshan port provided the better hardware environment to improve the throughput capacity of Shanghai ports. However, it is clear that the flow of goods is greatly improved and the efficiency of ports has grown significantly with the rapid online transmission of information and document flow through E-port. [5]
container throughput 3000 2500 2000 1500 1000 500 0 cargoes throughput

2172 1808 1455 861 307


163

2801 2615

1128
316 379 443 537 561 582

422 561 634


221 186 204

263

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Figure 5. The Development of Ocean Ports in Shanghai Without other positive and negative factors that affect trade volume, the value was thought as same. The total trade and port throughput are combined in one table as shown in Figure 6, and their relationship is easy to be analyzed. The total of imports and exports also showed a growing trend, and especially in 2001, the increasing slope indicated that the growth of trade volume and the improvement of port throughput capacity are inseparable. In case of the previous port efficiency, only the improvement of port throughput capacity in a year could reach far from as large as the increasing number. That is, the faster increase in port throughput capacity, the bigger trade volume in growth, and the amount of trade total will be enhanced with improving the port efficiency. Therefore, it is speculated that the volume of trade is in accordance with the proportion of growth in port throughput.

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Study on System Application and Efficiency Analysis of China E-Port Yiqun Li, Qing Nie, Xuezheng Zhang Journal of Convergence Information Technology, Volume 6, Number 2. February 2011

Trade Totle(Million USD)


60000

Port Throughput(Ton)
53886

50000 40000 31707 30000 18646 20000 16325 10000 6364 0 7615 20457 22162 20120 10931 12049 14250 26383 38058

44463 42875 35068 28260

1998

1999

2000

2001

2002

2003

2004

2005

2006

Figure 6. The Growth of Trade Volume and Port Throughput Based on the diagram, the function is shown as: Y = AX + B (1)

In a straight line graph (Figure 7), it is selected that the point (200,100) and points (300,200), resulting in A=1. The value of B is not considered because the different units will have some differences. Therefore, it is inferred that the relationship between Y and X is proportional. It can be concluded that: the efficiency of customs clearance will greatly enhance the growth of trade value. It plays an enormous role in promoting the development of Shanghai international trade how to greatly improve the efficiency of port customs.
Actual Ratio

500 400 300 200 100 0 0 100 200 300 400 500 600
Cargoes Throughput(Million Ton)

Figure 7. The Chart of Y=AX+B function

4.2. Customs Supervision


One of the main purposes of customs declaration for import and export is to monitor the import and export goods. Goods delivery among different countries must comply with the different law. Sometimes the use of electronic declaration is worried not to allow a more relaxed regulatory, and means that the responsibility and power of customs supervision could reduce the intensity. In fact, the use of e-port system can help improve the regulatory capability of the customs department, for example, the advantages of information systems in the processing trade regulation as following Figure 8.

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Study on System Application and Efficiency Analysis of China E-Port Yiqun Li, Qing Nie, Xuezheng Zhang Journal of Convergence Information Technology, Volume 6, Number 2. February 2011

SFTC

Enterprises

Customs

Intranet

Extranet Customs Broker E-port platform Figure 8. The flow of processing trade

Server

The processing trade means such trade activities, importing goods in whole or in part from the outside bonded area, such as raw and auxiliary materials components, packaging materials and so on (hereinafter referred to as imported materials and parts), and exporting finished and semi-manufactured products after domestic enterprises processing and assembly. In China, the customs regulation for the processing trade include: the approval, record and change of the electronic account, the customs declarations, and the foreign exchange management. [6] The regulatory of processing trade in Shanghai are almost operated through the electronic accounts. The electronic account users must apply for the only number to carry out the processing trade for record. Subsequently, in the production process, if the rest materials were sold in domestic because of the changes in contract, it should be approved by the Economic and Trade Commission. During the approval, the first step is applying online and then printing the required information. Finally it is completed to finish the formalities and pay on the counters. Although in the actual operation, it is still required manual proofreading at the counter, in fact, online applications have been greatly optimized the approval process. At the same time, such information also will be recorded in the database. With more strict regulation, all of the necessary information should be transmitted through the network at the customs and foreign trade and economic cooperation departments, timely and correctly. From the beginning of the processing trade contract, the enterprises are required to record, apply to the final completion of the contract also required the end of the tax rebate applications. It means avoiding the use of deception or false means to escape customs supervision. [7]

4.3. Social Impacts


As the economic center in China, Shanghai receives more attentions from all over the world for its level of trade and economic development. With more and more people hope to carry out investment and trade in Shanghai, the capacity of Shanghai port is always compared with other advanced port. Therefore, whether adopting the advanced technology, management and model, the development of Shanghai port logistics not only affect the trade volume itself but also becomes a key factor to evaluate the international advanced level of Shanghai. As known in those advanced countries, the capacity of ports should also be essential for top major exporters. In recent years, the development of surrounding areas of Shanghai is also very rapid. Many of the projects in Shanghai are beginning to spread because of shortage of land resources in Shanghai, and some projects covering large-scale area should not be in a good implementation. Therefore, the use of the hardware environment of the surrounding region to facilitate these projects, not only enhances the capacity of Shanghai from to an important role, but also helps to develop the regional economy. Such as Shanghai Yangshan Deepwater Port, is a good example for the radiation surrounding. Although the Yangshan Port in the region of Zhejiang province, the port customs businesses are operated in Shanghai for uniformed management and customs declaration through the network. Through the transit of the water directly into the Shanghai, it greatly reduced the redundant aspect, such as transit, and solved the Shanghai port development on the geographic limitation as well. [8]

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Study on System Application and Efficiency Analysis of China E-Port Yiqun Li, Qing Nie, Xuezheng Zhang Journal of Convergence Information Technology, Volume 6, Number 2. February 2011

Furthermore, with the development of e-port, some related industries are evolving at a higher level, for example, freight, shipping and processing trade, which previously required a lot of labor power and now can be resolved through the network. In particular, the companies are able to conveniently query via Web for shipping information, to monitor and control of goods to confirm information what they know timely and quickly. [9]

5. Conclusions
With a sustainable development of export-oriented economy in China, port logistics information system should be placed in an important position. First of all, the port, dock, yard logistics hubs are all represented by information platform under construction. Second, the bonded areas, export processing zones and other Port Authority Area information platform construction has made initial success. Thirdly, a single port logistics platform is the largest integrated development of regional logistics. Developed by the Shanghai Customs-led "Yangtze River Delta regional customs integration program for reform" are being implemented. Fourth, all efforts is greatly expanding the integration of customs clearance. Beginning in 2002, an electronic customs clearance, served to tax, business, commodity inspection, maritime, banking and so on to expand, gradually formed a true sense of the "paperless customs clearance" from the harbor to expand into the dry port, airport and realize seamless connectivity. A combination of various advanced techniques, such as the Global Positioning System (GPS), public data networks and information platforms, mobile communications short message notification, speeds up customs clearance. In this paper, it is mainly analyzed how to improve the efficiency of customs clearance under the construction and development of E-port system. The use of information system is in common in any aspect to play the role of improving efficiency. The application of Shanghai e-port reflects the developing trend of international logistics and provides a good example how to combine software with hardware to upgrade the logistics environment. In the future, the considerably potential of e-port will promote the efficiency of international logistics center in Shanghai if there were a breakthrough in the bottleneck of customs management and mechanism.

6. Acknowledgement
This work is supported by the 085 Knowledge Innovation project of Shanghai Municipal Education Commission (08509009-03) and the Research Foundation of International Trade Education Space of International Business School, Shanghai Institute of Foreign Trade. The authors are grateful for the anonymous reviewers who made constructive comments.

7. References
[1] Yiqun Li, Li Xiong, Rui Wang, "The Informatization Development of Foreign Trade Enterprise in

China: Case in Proceeding Trade", JDCTA, Vol. 4, No. 7, pp. 79 ~ 87, 2010. [2] Yiqun Li and Qing Nie, Study on the construction and development of Shanghai e-port System, The Fifth IEEE International Conference on Service Operations, Logistics and Informatics, Chicago USA, 2009, pp. 295 ~ 299. [3] China E-port website : http://www.chinaport.gov.cn [4] Zhang Mai and Wang Shiyi, The Port Logistic Management under E-business, China Supplies Flow, July 2004. (in Chinese) [5] Yearbook of Shanghai Informationization, China Social Sciences Press, 2005-2008. (in Chinese) [6] The Port Project in 11th Five-year Plan, The Compilation of Shanghai E-port Outcomes, 2005 (in Chinese) [7] Donald Lam, Port operations in a changing environment, Port Review, 2003. [8] Hongwei Wang, Lijuan Zheng, James N.K. Liu, "Measuring The Performance of Information Systems Using Data Envelopment Analysis", JDCTA, Vol. 4, No. 8, pp. 92 ~ 101, 2010. [9] Tiejun Pan, Leina Zheng, Guoqing Yan, "Research of Information Framework for Fourth Party Logistics", JCIT, Vol. 5, No. 7, pp. 90 ~ 99, 2010.

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