Heavy logistics costs weigh on China's economy

Chinese will have to spend nearly one in every five dollars of its gross domestic product (GDP) on logistics costs to achieve the 9.2 percent economic growth of last year, according to an official report released Tuesday. China's logistics costs increased 18.5 percent year-on-year to reach 8.4 trillion yuan (1.33 trillion U.S. dollars) in 2011, said a report issued by the National Development and Reform Commission, the National Bureau of Statistics and the China Federation of Logistics and Purchasing. The logistics costs for the economy were quite high, said the report. With the growth accelerating 1.8 percentage points from the same period of a year earlier, total logistics costs accounted for 17.8 percent of the nation's 47.16-trillion-yuan GDP last year, compared with 18 percent in previous year. Chinese spent 4.4 trillion yuan in transporting goods, an increase of 15.9 percent year-on-year. Storage costs rose 22.6 percent year-on-year to 2.9 trillion yuan while management fees amounted to 1 trillion yuan, up 18.7 percent, said the report. Since last October, the State Council, or China's cabinet, has campaigned to boost the country's logistics capabilities and better link producers and consumers to cut intermediary costs. The country moved 158.4 trillion yuan worth of goods last year, up 12.3 percent in terms of inflation-adjusted prices, according to the report. The logistics sector reported an output of 3.2 trillion yuan last year, up 13.9 percent year-on-year in terms of inflation-adjusted prices.