(Yicai Global) Oct. 11 -- TransContainer PAO [MCX:TRCN], Russia's largest container operator, set up its first wholly-owned subsidiary in China in the Shanghai Free Trade Zone yesterday, Chinese news outlet The Paper reported.

The new company has registered capital of USD1.2 billion and is named TransContainer Freight Forwarding Shanghai Co. The parent already has a division in China through a joint venture with a China Railway Container Transport Corp. subsidiary, which it set up in Beijing in 2010.

TransContainer was founded in 2006 as a subsidiary of United Transportation and Logistics Co., which was set up by Russian Railways JSC, Belarusian Railway and Kazakhstan National Railway Co., Petr Vasilevich Baskakov, chief executive of TransContainer, said at the new company's opening ceremony yesterday.

TransContainer makes up more than 50 percent of Russia's rail transport market. It has 19 rail freight stations in Kazakhstan, 42 proprietary container terminals in Russia, and 115 distribution outlets in Russia, the Commonwealth of Independent States and other Eurasian countries.

Cargo freight volumes between China and Russia have been on the rise in recent years thanks to the Belt and Road Initiative, said Egor Braginets, general manager at the new company. TransContainer already had offices in Beijing and Shanghai, but they were not allowed to engage in operational work. It has decided to set up the subsidiary to better service its Chinese clients and expand trade between the two countries.

"Shanghai has the largest port in China and has an edge in cargo transport and logistics," Braginets said on why TransContainer picked the metropolis as the home for its new subsidiary. "Its neighboring provinces Jiangsu and Zhejiang are home to a large number of manufacturers. Also, many leading European and US companies have headquarters in Shanghai. We were able to enjoy the benefits offered to companies in the Shanghai Free Trade Zone, such as faster registration and one-stop services when registering the new firm."

TransContainer plans to set up offices up north in Qingdao and down south in Guangzhou next year in a bid to expand its business up and down the country, Braginets added, and may set up an inland branch in Chongqing or Chengdu in 2019.