Business review

Despite the current impact of the world economic crisis which has seen factory closures and job losses in China in recent weeks, China is expected to continue as the leader in global trade and remain an important market for international freight.

Although China’s growth rate has fallen to 9% in the third quarter of 2008, down from its growth rate of 11.9% last year, this is still a remarkably impressive growth rate.
Similarly, although growth at China’s two largest ports,  Shenzhen and Shanghai have slowed down this year, we are still seeing an overall pattern of growth in freight forwarding.

To cope with ongoing growth in freight forwarding, new container terminals are being built and existing facilities are being expanded across China’s eastern seaboard.
The third berth at Shenzhen’s Dachan Bay Terminal One has now been completed and there will be three more berths by the end of 2009.

A consortium is also planning to build a four berth second Dachan Bay terminal, to be completed by 2010. This investment is justified against an expectation of continued increase in demand for freight services in the region, with the South China market expected to grow at 10% per annum in the coming years.

Despite the recent downturn, China remains the factory of the world, with efficient manufacturing, low labour costs, high quality infrastructure and effective freight transport. What’s more, the Beijing government is acting decisively and taking measures to reverse the impact of the world economic crisis. This proactive approach will have a beneficial impact on freight forwarding.

Export taxes have been cut on steel, chemical products and grain. Export duties will be cut on December 1st 2008 on over three thousand other goods, as part of a 586 billion dollar economic stimulus plan. These positive steps are likely to ensure that China import markets will continue to grow over time.  No other manufacturing country on a similar scale can offer the same winning combination of high productivity and low costs.

There is considerable scope to extend China’s imports further into the European Union, as the level of China import to Europe lags behind the level of China import to the U.S. It is estimated that there is potential to increase this by at least 20%. Meanwhile, outsourcing by Europe to China and other markets continues apace, creating a further boost for shipping companies and freight forwarding. With the possible exception of clothing, there is still opportunity for China to increase its share of production from the current levels of less than 10% of global production.

This positive picture overall is reflected in the growth of container terminal facilities across China. For example, the Yangtse River Delta is home to many developments and both Yantian and Nansha are planning new facilities, which are of interest to any freight company involved in China import. Also the Bohai Bay Region, with its sub-regions of Tianjin, Dalian and Quingdao are expected to experience growth.

A further positive development is that relations between China and Taiwan have improved since Taiwan appointed a pro-China President Ma Ying Jeou. It is anticipated that Taiwan will relax its trade policies towards China and this will create a boost for China and in particular for freight forwarding in Xiamen. Indeed, Xiamen has now had its plan to set up a free port zone at the Haicang Port area approved by the Chinese government.

It is expected that China and the Association of South East Asian Nations (ASEAN) will form a free trade zone in 2010 and this will be a further catalyst for the growth of international freight in the south west region of China.

So despite the current headline news about factory closures and job losses in China, the prospects for freight services and China import remain rosy in the medium to long term.

Stephen Willis is Managing Director of RW Freight Services a UK based freight transport company, established in 1971 and operating worldwide freight forwarding services including specialist freight services to and from China

Article Source: ArticlesBase.com - China Import Surviving the Downturn