Strong Chinese volume growth to continue this year
But analyst warns growth will slow in the future as domestic economy focuses on internal demand
China’s transport sector will continue to see strong international volume growth for the rest of the year, according to the latest research from BMI.
But the analyst also warns that expansion will slow in the coming years as the domestic economy realigns to focus more on internal demand.
BMI predicted international investors would target air freight investments in China as the market consolidates.
Air freight volumes are expected to increase by 11.2% this year after last year’s contraction of 3.9%, according to China Freight Transport Report Q4 2010.
Improving road connections and a move towards higher value cargo shipments would see trucking volumes increase by 8% year-on-year in 2010, while rail freight carriage would rise by 7.8%, offsetting last year’s drop of 2.5%.
“BMI is projecting an increase in volume at the Port of Shanghai (POS), up by 15.6%, after the 13.6% contraction during the slump last year,” said the report.
“At the Port of Ningbo Zhoushan (PONZ) we see this year’s volume gaining by a very strong 27%. Shanghai is expected to see 10.6% container handling growth while PONZ will see growth of 5.1%.”
In real terms, BMI predicted China’s total trade would surge by over 20% this year after contracting13.5% last year.
“However,” warned BMI, “2011 will see the brakes applied again, with trade growth reducing right down to only 2.5%, making for three very volatile years.
“BMI’s medium-term forecast is for average annual real term trade growth of 7.9%, almost on a par with GDP, and representing something of a slowdown on the earlier part of this decade.
“In fact, we believe that behind these rather stop-go figures a fundamental realignment is taking place, with the driver of the Chinese economy shifting from exports to internal demand.
“Notably, over the next five years we expect imports to grow by an annual average of 9.9%, significantly above exports of 6.3%.”
But the analyst also warns that expansion will slow in the coming years as the domestic economy realigns to focus more on internal demand.
BMI predicted international investors would target air freight investments in China as the market consolidates.
Air freight volumes are expected to increase by 11.2% this year after last year’s contraction of 3.9%, according to China Freight Transport Report Q4 2010.
Improving road connections and a move towards higher value cargo shipments would see trucking volumes increase by 8% year-on-year in 2010, while rail freight carriage would rise by 7.8%, offsetting last year’s drop of 2.5%.
“BMI is projecting an increase in volume at the Port of Shanghai (POS), up by 15.6%, after the 13.6% contraction during the slump last year,” said the report.
“At the Port of Ningbo Zhoushan (PONZ) we see this year’s volume gaining by a very strong 27%. Shanghai is expected to see 10.6% container handling growth while PONZ will see growth of 5.1%.”
In real terms, BMI predicted China’s total trade would surge by over 20% this year after contracting13.5% last year.
“However,” warned BMI, “2011 will see the brakes applied again, with trade growth reducing right down to only 2.5%, making for three very volatile years.
“BMI’s medium-term forecast is for average annual real term trade growth of 7.9%, almost on a par with GDP, and representing something of a slowdown on the earlier part of this decade.
“In fact, we believe that behind these rather stop-go figures a fundamental realignment is taking place, with the driver of the Chinese economy shifting from exports to internal demand.
“Notably, over the next five years we expect imports to grow by an annual average of 9.9%, significantly above exports of 6.3%.”
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