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China key to intra-Asian container shipping growth

China key to intra-Asian container shipping growth
Intra-Asia trade growth must be understood within the context of China’s role as it drives all growth in the Asia-Pacific, was the message Seabury director of maritime Michel Looten at the recent TPM Asia conference.

To set the backdrop, he noted that China, the rest of Asia and the Middle East and Indian subcontinent made up 79% of global containerized exports in 2014. However, much of that is being traded within the region, thus the importance of the intra-Asia trade.

This lane is not only the largest trade lane from Asia but has also grown faster than North American and Europe trades.

“Southeast Asia has grown quite fast over the last few years and is now the biggest import region for China,” Looten said. Seabury figures show China’s imports from the region grew 12% in 2014.

This has come at the expense of imports from Northeast Asian countries such as Korea, Japan and Taiwan, which have declined, he added.

This picture is replicated on the export side as well, with exports to China’s traditional major export markets of North America, Europe and Northeast Asia being outgrown by exports to Southeast Asia, the Middle East and Indian subcontinent over the past four years.

Although volumes to the three main regions are still high, averaging over 6m teu per year in 2010 and going up to almost 10m teu in the case of North America in 2014, the rate of growth has been minute compared to Southeast Asia’s 14% growth rate from 2010 to 2014, although this is from a lower base, Looten said. These high growth rates can also be seen in exports to Middle East, Indian subcontinent, and also to Africa, he added.

“These are the kind of growth rates that lines are looking for and which is interesting while Asia-Europe seems to be the market that is almost asleep for the past five years,” Looten remarked.

“Southeast has by far the highest growth rate and relatively decent volumes so that’s a good start I would say,” Looten said. But putting things into perspective he pointed out that Southeast Asia’s share of global exports makes up only 14% compared to China’s 32% and stay mainly within the region.

“It is very unlikely that Southeast Asia will replace China as a source of global container growth,” he concluded.