China Merchants Joins Smart and Secure Tradelanes to Enhance Container Security and Management Efficiency.

Business Editors/High-Tech Writers

WASHINGTON & HONG KONG--(BUSINESS WIRE)--April 24, 2003

Largest Container Terminal Operator in Mainland China and Hong

Kong Links with Global Security Network to Provide Real-Time

Visibility of International Shipments

China Merchants Holdings (International) Company Limited (CMHI), the major container terminal operator in Mainland China and Hong Kong, today announced that it is the first China-based port operator to join Smart and Secure Tradelanes (SST), enabling CMHI's customers to gain new competitive advantages through its affiliation with SST's rapidly expanding global security network. The announcement extends SST's global security network into China's important trading center at the Port of Shenzhen, linking China with other SST port operations in Asia, the United States, Latin America and Europe.

The announcement was made jointly yesterday by the Strategic Council on Security Technology (SCST) and CMHI during an official ceremony at CMHI's Hong Kong headquarters. SCST is an advisory resource composed of international leaders committed to improving supply chain security in cooperation with government agencies, and which helped launch SST last summer. Also participating at the announcement was a number of industry executives and government dignitaries.

CMHI's initial deployment of SST's software and automatic identification technologies at the Port of Shenzhen, combined with CMHI's compliance with U.S. Customs' Container Security Initiative (CSI) and 24-Hour Manifest Rule, will help to ensure that container handling operations at the company's major Asia-based port facilities will be among the most secure and efficient in the world. Initial installations over the next several months will be at two container handling terminals, SCT and CCT, in the western Shenzhen region, an area experiencing rapid growth in container shipments to the United States, providing China Merchants with greater physical security measures, automated data interfaces with U.S. Customs and speedy clearance processes for outbound shipments.

Container handling operations are being equipped with unique software that's integrated with best-of-breed, proven automatic identification technologies from multiple vendors, including bar codes, satellite tracking systems, sensors, and a variety of mechanical and electronic seals (E-Seals) that digitally lock the containers and transmit real-time alerts about tampering and other events over radio frequencies. SST leverages technology and infrastructure developed by Savi Technology for the Total Asset Visibility network, which is the world's largest wireless cargo tracking system -- currently deployed in 46 countries at over 700 locations.

To date, the SST consortium includes more than 60 leading port operators, shippers and service and solution providers, and SST's security network infrastructure has been installed and activated at 15 mega ports worldwide that collectively handle more than 70 percent of world trade. SST's capabilities provide real-time visibility, automated, non-intrusive tamper detection, and complete audit trails of cargo containers from origin to destination.

"Since the Sept. 11th tragedy, knowledgeable professionals have recognized the many security vulnerabilities throughout today's global supply chain, and especially in the ocean freight industry where weapons of mass destruction could be concealed in one or more of the millions of 40-foot containers shipped worldwide every year," said Dr. Hau Lee, a founding member of SCST, a Thoma Professor at Stanford University's Graduate School of Business, and the Founder and Director of the Stanford Global Supply Chain Management Forum. "The addition of an internationally important partner such as China Merchants -- one of China's premier public companies -- indicates the growing acceptance of SST as providing best-of-class, real-time solutions for containing security threats and ensuring the efficient flow of cargo traffic globally."

"China is one of the major trade partners for the United States as well as many other countries in the world," said Dr. Fu Yuning, CMHI's Chairman. "As one of the most significant port operators in our region, we are pleased to fulfill our global citizenship obligation to invest in security improvements and to serve our customers.

"The continuous high growth rate of China will only strengthen our partnership with the United States, and our participation with CSI and SST, in the future," Dr. Fu added. "As our ports are part of the global supply chain, the more capable we are in boosting cargo security, the less vulnerable we are to terrorist threats. At the same time, we hope our participation helps to expedite global recognition and adoption of SST, CSI and the 24-Hour Manifest Rule. We also appreciate the intention and efforts of the Strategic Council on Security Technology in engineering SST and other campaigns aimed at enhancing security against terrorist threats while improving supply chain efficiency."

CMHI already had begun installation of the SmartChain software platform, Transportation Security System software application and RFID data capturing readers at the Port of Shenzhen in China, where CMHI saw throughput at its operations soar 46 percent to about 3.3 million twenty-foot equivalent units, in TEUs, in 2002. The readers capture transmissions from electronic seals (E-Seals) that are digitally locked onto containers, and then relay the information in real time to the SmartChain platform. As a result, partners managing the containers received automated Alerts on their computers, cell phones or PDAs whenever there is a key Event, such as tampering, mis-routes or delays.

About the Strategic Council on Security Technology

The Strategic Council on Security Technology is an international assembly of top executives from the world's largest port operators, major logistics technology providers, four-star generals, former public officials and prominent transportation consultancies. Acting as an international resource, the Strategic Council on Security Technology is committed to helping ensure greater supply chain security through best-of-breed practices and technologies while working with a variety of other industry associations. For more information, visit www.scst.info.

About China Merchants Holdings International

China Merchants Holdings (International) Company Limited, listed on the Hong Kong Stock Exchange, is part of the China Merchants Group which is one of Hong Kong's largest enterprises with a 130-year-old history and diversified business interests. CMHI's business is related to ports and shipping, and includes container terminal services, bulk and general cargo terminal services, airport cargo handling services and Aframax oil tanker transport services. Mainly centered in Hong Kong and Shenzhen of Guangdong Province, CMHI's ports and port-related business is broadening its geographical coverage to Southeast and East China. Its ports handled a total of 7.5 million TEU of container cargo last year, making CMHI the major container terminal operator in Mainland China and Hong Kong. For more information, visit http://www.cmhico.com/eng/index.asp.

Editor's Note: Photo of the signing ceremony available on request.