TRADE between North America and Europe with China and southeast Asia is expected to boom over the next five years, according to new analysis released by IHS Inc, a global source of critical analysis.
The World Trade Service of IHS Maritime & Trade forecasts that China's trade will continue to increase by five per cent a year into 2020. This outlook takes into account recent setbacks and weaker growth among emerging markets.
"These increases will not be the double-digit rises seen before the 2008 global economic crisis," said Krispen Atkinson, principal analyst at IHS Maritime & Trade.
"However, an increase of over 30 per cent in the next five years underscores China's intent to remain a new trade hub-and-spoke lynchpin for the rest of the economic world," he said.
There is move towards larger containerships. The four alliances that dominate east-west trade are ordering containerships of 20,000 TEU in their quest to reduce unit costs with ever more efficient vessels.
Current containerships hold around 13,000 boxes, so the new super-containerships can carry more than 50 per cent more cargo. Their push has meant further capacity has become available in the trade.
"China may be the major powerhouse in the region, but southeast Asia is making significant headway," Mr Atkinson said.
Vietnam's exports are estimated to increase 44 per cent by 2020. IHS forecasts a 44 per cent increase in trade between Vietnam and North America and a 43 per cent increase in trade between Vietnam and Europe in the next five years.
"In terms of actual cargo, the figures are still low when compared with China's, but these are still huge jumps for these economies," Mr Atkinson said.
Trade between these two regions is made up of manufactured goods, such as home appliances or mechanical hardware.
"Vietnam, India and many of the South Asian economies stand to benefit from recent energy and commodity price falls as net importers of these goods," said Jan Randolph director of sovereign risk analysis at IHS.
"They have significant industries and services sectors of their own that benefit from cheaper inputs and have currencies that are not coupled to a strengthening US dollar," he said.
Trade routes from China to Africa are expected to see a marked increase over the next five years, with the highest growth expected to be seen from the East African to China route, incorporating Malawi, Mozambique, Zambia and Zimbabwe.
"Trade between East Africa and China is expected to increase by 91 per cent by 2020," Atkinson said. "It's all around manufactured goods. East Africa is becoming a new hub for the Chinese," said Mr Randolph.
Chinese leadership has publicly announced its commitment to develop infrastructural and to promote regional integration in East Africa. "In the coming years, China's relationship with East Africa will change," said Natznet Tesfay, head of sub-Saharan Africa analysis at IHS County Risk.
"Right now, the focus is on importing raw materials and exporting manufactured goods. But, Chinese investments in enhancing regional interconnectivity will enable it to take advantage of comparatively lower operational costs and to onshore manufacturing activity in East Africa," he said.
WORLD SHIPPING
06 September 2015 - 20:45
Despite downturn, IHS analysts expect mainline trade routes to thrive
TRADE between North America and Europe with China and southeast Asia is expected to boom over the next five years, according to new analysis released by IHS Inc, a global source of critical analysis.
WORLD SHIPPING
06 September 2015 - 20:45
Despite downturn, IHS analysts expect mainline trade routes to thrive
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