Over the past few years, an oversupply of vessels has been the most influential factor for practically all shipping segments. This supply side problem has dominated discussions and forecast models.
With a re-balancing underway, it’s time to focus on other influential aspects of maritime trade. So, let’s start with what may be the single most important nation when it comes to maritime trade, China.
China has grown rapidly over the past three decades and, now, makes up over one-seventh of the global economy. It is the world’s largest exporter, a top tier importer, and has the largest base of consumers in the world. Though some reports indicate India may have eclipsed China in terms of population, they do not posses similar purchasing power. 2016 saw average Chinese annual income at 67,569 Yuan (roughly $10,209) as opposed to India which saw a 2015-2016 fiscal income average of Rs 93,293 (roughly $1,436).
China has long been the world’s factory, but now, a strengthening consumer base, increasing car ownership, government directed shifts in energy policy, and a host of other factors have been playing a greater role in influencing maritime trade.
With over 80% of global trade by volume and more than 70% of its value being carried on board ships and handled by seaports worldwide, the importance of maritime transport for trade and development cannot be overemphasized. The fact is that China and shipping markets are inextricably linked, for better or for worse.
The UN noted in its October 2017 maritime trade report:
Strong import demand in China in 2016 continued to support world maritime seaborne trade, although overall growth was offset by limited expansion in the import demand of other developing regions…”
Read the full article at https://seekingalpha.com/article/4125920-chinas-debt-management-poise-risk-shipping?ifp=0