China’s shift towards a domestic consumer demand-oriented economy could provide a significant boost to the global shipping industry, as the world’s second largest economy targets more sustainable growth.
“2013 will be another peak year of new vessel deliveries. Oversupply of capacity is still an obstacle for the shipping industry to overcome, but with the improvement of the world economy, the shipping sector is expected to experience moderate growth,” said Mr Xu Lirong, President of China Shipping (Group) Company.
Mr Xu will examine this key issue affecting China, and the nation’s pivotal position in the international maritime arena, in a conference summit at Sea Asia, the region’s leading maritime event, in Singapore next April.
Sea Asia’s co-organisers, Seatrade and the Singapore Maritime Foundation (SMF), have invited leading industry figures, alongside Mr Xu, to spearhead a senior level debate on the future of China’s maritime sector. These include Andy Tung, Chief Executive Officer of Hong Kong’s Orient Overseas Container Line, and Chen Bin, Deputy General Manager, Transport Finance Department, China EximBank.
China’s domestic economy is expected to hit the authorities’ target of 7-7.5% annual growth this year. It is estimated that if the economy continues to grow at 7% per year, about half of the country’s population (circa 700 million) will join the Middle Classes by 2020. Annual income is projected between $7,000 and $23,000 (according to statistics issued by the Boston Consulting Group).
Some economists have forecast 2012’s growth as strong as 8%, with China’s manufacturing sector performing especially well. In particular, commentators say China’s container shipping industry, despite the current oversupply of capacity, will keep expanding in the longer term.
Questions the Chinese leadership are currently grappling with include the issue of finance and to what extent domestic banks can fill the void left by foreign lenders.
Industry insiders are also mulling the puzzle of exactly how China’s shipping fleet may develop, in the next few years, to best meet the demands of its economy.
Accordingly, Mr Xu, Mr Tung, and Mr Chen, among others, will set their minds to tackle these and other key questions at Sea Asia 2013. In Sea Asia’s dry & liquid bulk cargo discussion (scheduled for Day One, 9 April 2013), the matter for address will be China’s growth, the growth of other major Asian economies, and what these may mean for tonnage demand. The ship finance session (Day Two, 10 April) will include a think tank discussion of the role of Chinese banks in ship finance, plus their overall outlook and attitudes to industry lending. During the offshore sector discussion (also Day Two), there will be a comparative session on China’s investment in offshore exploration, both domestic and international.
Christopher Hayman, Chairman of Seatrade, explained the rationale: “In constructing major topics for discussion at Sea Asia 2013, we took the decision to focus significantly on the role of China since it is arguably the most influential Asian economy right now.”
This year has seen many domestic shipping lines report higher imports into China as the economy transforms. Most commentators believe this is a positive trend for world shipping. “We also know China’s economy is transforming. International shipping, and its own domestic sector, must adapt to that,” said Mr Hayman. “Sea Asia 2013 is the ideal forum for business leaders to listen to views from experts on China, and participate in debate about a nation and economy that is sure to shape the global landscape for years to come.”
Sea Asia 2013 is the fourth edition of this global event showcasing the maritime industries in Asia. Sea Asia has grown by 70% since it began, in 2007, and around 14,000 visitors from around the world are expect when it returns, 9-11 April.