Clarkson Research: Ten Years Review Of China's Shipping Market

- Feb 28, 2020-

  Novel coronavirus pneumonia in the previous report on the impact of the shipping market, we mentioned that compared to the 2003 SARS virus diffusion period, China's influence in the global shipping market is more extensive and far-reaching. In this push, we will review the performance of China Shipping in the past decade. As the first shipping research institution to enter the Chinese market, Clarkson research China office has grown and developed together with Chinese shipping enterprises in the past decade. We have witnessed the achievement of one milestone after another in the Chinese market: the rapid expansion of China's maritime trade in the 2000s has greatly promoted the development of the shipping market, and the development of China's shipping in the 2010's has been further enhanced In the past decade, China's marine imports have doubled, Chinese shipyards have maintained a leading position, and the fleet size owned by Chinese shipowners ranks the second in the world.            China's maritime trade: boosting global growth            The 2010's is a period of remarkable economic growth and change of growth mode in China. The average growth rate of China's GDP in 2000 was about 10.3%. In the early 2010's, in order to boost the economic development affected by the financial crisis, the Chinese government implemented the four trillion economic stimulus plan, which promoted the expansion of fixed asset investment, which had a significant effect on China's economic growth in the early 2010's. Since then, China's GDP growth has remained strong (annual growth rate of GDP in 2010 was about 7.7%), but with the economic maturity, China's GDP growth began to slow down in recent years (since 2015, the average growth rate of GDP is about 6.6%), and the cyclical low points of economic growth appeared in 2015 and 2019 respectively.            Nevertheless, the sustained growth of China's economy, energy demand and manufacturing and industrial capacity over the past decade has provided the impetus for China's significant trade expansion. Although the annual growth rate of China's marine imports slowed from about 20.0% in 2000 to 7.1% in 2010, the overall import volume doubled from 1.37 billion tons in 2009 to 2.63 billion tons in 2019, which was mainly driven by the increase of iron ore, crude oil and coal imports. During this period, the growth of China's trade has contributed 50% to the expansion of global maritime trade, and the proportion of China's import volume in global maritime trade has also increased from 17% to 22% over the same period. Similarly, China's maritime export growth slowed down in 2010, from 9.7% in 2000 to 4.8%. However, the total volume of China's maritime exports rose from 448 million in 2008 to 586 million in 2019. The increase of container exports is the main driving force for growth.            Chinese shipyard: market leading            In the shipbuilding sector, in the late 2000s, China's shipbuilding capacity achieved the fastest and largest growth ever. Driven by this, China's shipyards are also far ahead in the share of global hand-held orders, accounting for 37% of the revised total tons. Although the arrival of the global financial crisis has reduced the delivery volume of Chinese shipyards by half since the beginning of 2010, China still accounts for the largest share of global shipbuilding capacity in 2019 (about 34%). In 2010, it also witnessed the significant integration process of China's shipbuilding capacity. With a large number of small-scale private shipyards leaving the market, the number of active shipyards in China (at least one ship with a total tonnage of more than 1000 tons in hand-held orders) has dropped from 392 a decade ago to 120. At the end of 2019, China's two largest state-owned shipbuilding groups, CSIC and CSSC, formally merged.            Scale of Chinese Fleet: continuous expansion            In 2010, the average expansion rate of fleet owned by China was about 11.7%, which was higher than that in 2000 (about 8.8%), and the growth rate was the fastest level of major shipowners in the same period. In the late 2010's, China's total fleet size was second only to that of Greece, ranking second in the world, after ranking fourth in 2009. In the second half of 2010, the integration of major shipowners in China was also significant, such as the merger of COSCO Group and CNOOC Group. In addition, with the rising of leasing companies, China's position in the global ship financing market has also significantly improved in the 2010's.            Attention is still needed in the next decade            So, how will China's shipping develop in the next decade? China's increasingly mature economy, continuous transformation of China's energy consumption structure, and China's continued important position in the global maritime trade will all become important factors affecting China's shipping development, and China information monthly will continue to pay close attention to the development of these factors.