China's ports to ride on economic recovery and rising exports: Moody's

China's economic rebound and rising exports amid reduced production in countries facing lockdowns will continue to buoy the country's ports, says Moody's.

"We forecast China's GDP [gross domestic product] will grow at 8.0 per cent in 2021 and 5.3 per cent in 2022 and container throughput to rise at 9 per cent in 2021 and 4 per cent in 2022. China's market position will continue to be dominant over the next three years, supported by the country's port connectivity, well-established port infrastructure and integrated supply chain," said Ralph Ng, a Moody's vice president and senior analyst, in a company press release.

Moreover, consolidation among the country's ports will reduce internal competition and enable better resource allocation. Meanwhile, announced port tariff reductions are mainly related to government levies and have minimum impact on ports.

China captures about 30 per cent of global total container throughput with seven of the 10 busiest container ports located in the country as of 2020.

The International Monetary Fund projects global GDP to grow at 5.9 per cent in 2021 and 4.9 per cent in 2022. Similarly, the World Trade Organisation estimates global trade volumes will increase by 10.8 per cent in 2021 and 4.7 per cent in 2022. Global GDP and container throughput declined in 2020 because of lockdowns and the suspension of business activities.

Prolonged disputes between China and the US, the EU, Canada and Australia have affected throughput volumes. Tensions on multiple fronts are likely to continue, which could weigh on the rebound of throughput volumes, Moody’s added.

Fibre2Fashion News Desk (DS)