China’s Slowdown and its Port Strategy TPM 2016 29 February 2016
China's Slowdown and its Port Strategy Background China’s economic growth: Official real GDP growth target for 2015 was 7% • 6.9% GDP growth in 2015 vs. 7.3% in 2014 • 6.5% GDP growth for 2016 • This decline was both anticipated and an intended byproduct of economic restructuring. Tight monetary and fiscal policies, were largely responsible for the slow growth in 2015. 2
China's Slowdown and its Port Strategy 3
China's Slowdown and its Port Strategy China’s Outlook Slowing down of China’s economic growth rates is mainly due to country’s transition to consumer -based growth model. This slowdown will cause: Devaluation of the Yuan • Imports from china become relatively less expensive • Moreover, as China’s economy continues to grow, wages will continue to increase, hence: Increasing productivity • Maintaining high export levels • 4
China's Slowdown and its Port Strategy Container trade is ultimately driven by GDP growth. Drivers for Asia port infrastructure investments: Container trade • growth Increased vessel size • Increased • transshipment Growing intra-Asia • trade 5
China's Slowdown and its Port Strategy Port Infrastructure Investment Terminals and hinterland infrastructure are under severe pressure due to worldwide growing demand and higher container throughput peaks. Mega-vessels are forcing terminals to upgrade infrastructure and improve hinterland. 6
China's Slowdown and its Port Strategy Solution Terminal operators and hinterland transport companies will have to improve productivity and container flow, these can be achieved by: Optimize use of container handling equipment • Improve communication systems in the supply chain • Introduction of flexible workforce in order to better process more • efficiently through peaks 7
China's Slowdown and its Port Strategy Thank you Matthew D. Hoag Director, Operations and Commercial, DP World, Americas Region T. +1 704 246-0348, M. +1 980 333-7356 matthew.hoag@dpworld.com 8
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