The development modes of inland ports: theoretical models and the Chinese cases

Abstract

ABSTRACT This paper examines the development modes of inland ports based on the economic models and the Chinese empirical cases. After reviewing the recent policies in China, four modes, i.e., the government-driven mode, the seaport-driven, the market-driven mode and the corridor-effect mode, are established to describe the development of Chinese inland ports from the perspective of the driving forces. Moreover, we setup an economic model to compare them and conclude that (1) the seaport-driven mode promotes the larger inland port than the corridor-effect mode and the market-driven mode; (2) if the marginal capacity investment cost is low or the efficiency of the inland port is high enough, the corridor-effect mode leads to higher social welfare than the market-driven mode and the seaport-driven mode; (3) whether the government-driven mode promotes the larger inland port and higher social welfare than the other modes depends on the positive externality from the inland port to the social welfare; (4) The ‘Go west’ policy and the Belt and Road Initiative (B&R) promote the inland port capacity under all modes. Whether the Free Trade Zone (FTZ) and the port integration promote the inland port capacity depends on the port efficiency improvement after the implementation of these policies.