According to the report, waterway expansion and the construction of port-adjacent industrial zones are proceeding in parallel across the country. The stated rationale is that water transport carries lower unit costs than road or rail and suits bulk cargo.

The cost structure of water transport

For moving large volumes over long distances, water transport's unit costs run below land transport. The advantage is clearest for grain, coal, construction materials and containers — high-volume cargo with relatively low time sensitivity. The trade-off is continuous infrastructure work: channel depth management and lock operations.

The port-hinterland economy concept ties a port and its surrounding area into a single economic zone, placing processing, logistics and storage functions near the port to cut handling stages. Interior cities use it to narrow the cost gap with coastal ones.

What it means for Korean and Taiwanese firms

Lower inland logistics costs raise the competitiveness of interior production sites, which affects location decisions for foreign-invested firms operating in China. For companies that have weighed moving inland because of rising coastal labour costs, transport conditions become one variable in that calculation.

Water transport is, however, seasonal. Low water levels in dry periods and navigation restrictions during floods complicate scheduling. Plans that rely on waterways as a primary route therefore usually include alternative routing.

Hwagyo Sibo does not score this policy as a success or failure. Infrastructure investment shows results over years, and judgement requires the follow-on indicators — freight volumes and operating efficiency — to be published.