Trade

Might China finally be moving into a larger consumption role? There has been a massive shift in the ratio of Chinese exports vs. imports, in just one year. It could be just a temporary result of the downturn in the US & Europe, but it appears MDS Transmodal believes we're seeing a long-term change in trade patterns.

“In Q2 2008 there were only 56 tonnes of Chinese imports for every 100 tonnes exported. One year later, that figure has grown to 80 tonnes. If that trend continues, container lines will have to seriously address their strategies.” He says that Chinese exports drive the overall demand for global shipping capacity. “Here the picture is bleak. A year on year fall of 23% for Q1 2009 has been followed by a 22% decline in Q2 2009. The best that can be said is the decline has been arrested. Q2 2009 results are 24% lower than in Q3 2008, the peak quarter of all time.”

The consultancy has also examined the destination of Chinese exports and concluded that the decline in the ability of the West to consume Chinese goods is widespread. Ranking destination countries by their container tonnages received in 2008, growth cannot be found for Q2 2009 until China’s 22nd ranked export destination is reached (Saudi Arabia).

The 2nd quarter Chinese trade data, coupled with the announcement that US GDP continued to fall over the same quarter leads MDS Transmodal to one conclusion. “Our analysis of the trade data provides tangible evidence of a restructuring of the economies of the Far East and the Western world,” says Mr Garratt. “China, and probably the rest of the Far East except Japan, is sucking in the exports it needs to support its domestic economy that continues to expand – without needing to export in the same quantities it used to.”