Adjacent to Jiangsu, Henan and Anhui provinces, the city of Linyi in Shandong Province is aiming to become a trading and logistics hub in the region, said Lian Chengmin, mayor of Linyi.

He said trade and logistics are two powerful engines for Linyi's economic growth.

On the trading front, Linyi had 1,004 commodity trading markets last year. The Linyi Wholesale Town, the largest trading facility in the city, realized a transaction volume of 45 billion yuan last year, ranking among the country's top three wholesale markets for three consecutive years.

The Linyi Wholesale Town is composed of 49 transaction zones, including building materials, metals, textiles and clothes. It has more than 20,000 booths, attracting over 300,000 businesspeople from all over the country every day.

As for the logistics sector, Lian said the city has 10 commodity distributing bases and more than 40 large-scale logistics enterprises, with a combined commodity flow worth 150 billion yuan annually.

The Lichen International Logistic Corp is the largest logistics company in the city, whose commodity flow reached more than 30 billion yuan last year.

"Driven by the trade and logistics sectors, Linyi has witnessed rapid economic growth in recent years," said Lian.

Linyi's total gross domestic product (GDP) reached 100 billion yuan and per capita GDP hit 10,000 yuan for the first time in 2004. Last year, the city's GDP amounted to 140.49 billion yuan, up 16.3 percent from 2005. The per capita disposable income of urban residents hit 10,772 yuan, growing 18 per cent year-on-year.

"However, facing the fierce competition of other regions, the trade and logistics sectors need to further improve their facilities, management and operational modes to enhance their strength," said Lian.

For this purpose, he said, the city's authorities have mapped out new measures for the industries' upgrade.

One of the measures is the launch of a massive program to build and expand trading and logistic facilities in the city.

For example, the Linyi Wholesale Town now covers an area of six square kilometers. Within the next two years, the wholesale market will have 18 million square meters of floor space. By 2008, the market will cover a land area of 12 square kilometers, becoming a regional commodity transaction hub with more than 60,000 dealers and an annual transaction volume of 80 billion yuan.

This year, the city will invest 3.5 billion yuan in launching 22 trading and logistics facility projects, with a total floor space of 1.5 million square meters.

Lian said the city government encourages industrial players to adopt new operational modes, like chainstore operation, and operations combining production, trading, storing and distribution.

He said Linyi's plan to build a regional trading and logistics hub would mean huge opportunities for investors outside the city.

These investors, whether large or small, are welcome to participate in the construction of markets and logistics parks, set up enterprises or just rent booths in the markets, and will enjoy preferential treatment offered by the city government, Lian assured.