China's cargo throughput soars 10% in Q3 2023: Fitch Ratings

07 Nov '23

2 min read

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Insights

China's Q3 2023 cargo throughput rose by 10 per cent YoY, spurred by the NWLC impact on Guangxi ports and RCEP trade growth.
Despite a 11 per cent decrease in China's exports due to weak international demand, Fitch Ratings remains optimistic about future throughput, backed by a potential consumer spending rebound and regional trade agreements.

China has witnessed a robust increase in its cargo throughput, with a year-on-year (YoY) rise of 10 per cent in the third quarter (Q3) of 2023, according to Fitch Ratings. The expansion of the New Western Land-Sea Corridor (NWLC) particularly bolstered ports in the Guangxi region, with their cargo throughput skyrocketing by 29 per cent compared to the same period last year. This vigorous growth is set against a backdrop of a weaker base in 2022, which was affected by diminished demand from Europe and the US.

In alignment with the rise in cargo, China’s total container throughput experienced a growth of 6 per cent YoY. Fitch Ratings has identified the development of the NWLC as a key factor driving the container throughput surge in Guangxi’s ports. Other contributory elements include an escalation in trade activities with partners from the Regional Comprehensive Economic Partnership (RCEP), and the significant addition of five new foreign trade routes by Dalian Port in 2023.

Despite these positive figures in cargo and container throughput, China’s export landscape tells a different story. There was an 11 per cent YoY downturn in exports, underpinned by faltering demand. The decline is most pronounced in exports to the ASEAN and European Union markets, with reductions of 17.0 per cent and 17.5 per cent, respectively. Exports to the US also suffered a moderate decline, falling by 14.3 per cent. Nevertheless, exports to Russia surged by 28.4 per cent, defying the overall downward trend, as per Fitch.

Looking forward, Fitch Ratings forecasts that cargo throughput may continue to benefit from a resurgence in consumer spending within the US and China. However, the forecast is cautious, noting that global manufacturing activities remain subdued, particularly in the Eurozone, as reflected by its low manufacturing PMI. Still, the NWLC and RCEP trade bloc are expected to contribute positively to throughput growth. Additionally, a revival in China's manufacturing sector may spur demand for commodities, potentially reinforcing cargo throughput in the coming periods.

Fibre2Fashion News Desk (DP)

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