"Combining Awards and Subsidies" to Support the Reinforcement and Upgrading of Industrial Chains for National Comprehensive Freight Hubs

 Recently, the Ministry of Finance and the Ministry of Transport jointly issued the Circular on Supporting the Reinforcement and Upgrading of Industrial Chains for National Comprehensive Freight Hubs. It is proposed to concentrate efforts over approximately three years to support around 30 cities (including cities within urban clusters) in the reinforcement and upgrading of industrial chains for national comprehensive freight hubs since 2022.

Firstly, priority will be given to selecting six main hubs on the axes covering national major strategic regions such as the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Pearl River Delta, the Chengdu-Chongqing region, the Yangtze River Economic Belt, and the Guangdong-Hong Kong-Macao Greater Bay Area. Secondly, priority will be given to selecting hubs located along the continental bridge corridors, the Western Land-Sea Corridor, and other corridors involving the western regions and border passages. Thirdly, the joint application of two or more cities for comprehensive freight hubs will be encouraged. The support will be provided for not only transportation infrastructure nodes such as hub ports and stations but also important network chains formed by multiple interconnected nodes. Local governments will select cities or urban clusters for application, organize the formulation of implementation plans, set implementation goals, and refine these goals into quantifiable and assessable specific indicators. The Ministry of Transport and the Ministry of Finance will select the best candidates for support through competitive review.

In terms of fund allocation, the Ministry of Finance will, based on the list of recommendations from the Ministry of Transport and the financial capacity, allocate a certain portion of the vehicle purchase tax revenue to support local funds through the combination of awards and subsidies. Meanwhile, it will strengthen coordination and integration of funds from vehicle purchase tax subsidies for local road construction and other related projects, as well as funds from central enterprises. In principle, the award and subsidy funds shall not exceed 1.5 billion yuan for each city and 3 billion yuan for each urban cluster. In the first year of implementation, a uniform subsidy of 500 million yuan will be granted to each city (with a total subsidy cap of 1 billion yuan for each urban cluster).

Regarding the use of funds, it is emphasized in the circular that the subsidy funds should be used to support “hard connectivity” of infrastructure and equipment, guide the “soft connectivity” of rules, standards, and services, and guide the establishment and improvement of integrated operation mechanisms. The founds should not be used for land acquisition and demolition, real estate development, the construction of office buildings for Party and government bodies, or logistics park construction and operation unless specified for the purposes outlined above. Cities or urban clusters are encouraged to strengthen the coordination of funds from different sources, innovate investment mechanisms, and flexibly adopt methods such as injecting capital, PPP, equity investment funds, performance incentives, and government procurement of services to attract and leverage private investment.