The annual rate of capital turnover is between 10 and 20 in developed countries
(Hu 2009). That figure in China is 2.1 overall and 2.8 for manufacturing and key
materials-trading companies. This leads to increased holding costs, reduction in
revenue, and decreasing competition. As a result of the economic recession, 2009
was the toughest year for Chinese logistics over the past thirty years. The logistics
profit rate is currently less than 10 %, down from 30 % in 2000. Profit rates for
inventory and transportation are respectively about 4 and 3 %. Logistics volume in
international trade has indeed decreased about 20 %, but domestic logistics has
increased by over 20 % (Blue print: profit rate of logistics 2010). Third party
logistics in China accounts only for 2 % of the total logistics market, compared to