China's Economic Growth Boosts Port Throughput
China's Belt and Road Initiative is designed to make Chinese and partner economies more competitive and narrow development gaps between landlocked countries and coastal regions. Along with supply-side reform within China, this year's trade results demonstrate the benefits China is reaping, despite “volatile” times internationally.
In the first two months of 2018, the total value of China's imports and exports reached 4,515.8 billion yuan ($713 billion), a year-on-year increase of 16.7 percent. The total value of exports was 2,439 billion yuan ($385 billion), up by 18.0 percent; and the value of imports was 2,077 billion yuan ($328 billion), up by 15.2 percent. This gave a trade surplus of 362 billion yuan ($57 billion).
Trade among China and countries involved in the Belt and Road Initiative amounted to 7.4 trillion yuan ($1.2 trillion) in 2017, increasing 17.8 percent year-on-year, and free trade developments saw China signing agreements with Georgia and the Maldives and officially launching free trade negotiations with Moldova and Mauritius.
State media attributes China's solid performance this year to President Xi Jinping's philosophy of supply-side structural reform and the promotion of high-quality development. This ensured the value of the nation's industry was up by 7.2 percent year-on-year in real terms in the first two months of the year. The value of the mining industry was up by 1.6 percent year-on-year; manufacturing was up by 7.0 percent. The technology and equipment manufacturing industry grew by 11.9 percent and 8.4 percent respectively, and the production of new energy vehicles, integrated circuits and industrial robots grew by 178.1 percent, 33.3 percent and 25.1 percent respectively.
In February, throughput at Chinese ports grew by 2.9 percent to 677 million tons, and the first two months of the year saw throughput grow by 4.7 percent year-on-year. In one example of growth, Xu Lirong, chairman of China COSCO Shipping, said said container throughput accounts for 75 percent of Shanghai Port’s total business, with container throughput from countries and regions involved in the Belt and Road Initiative accounting for 35 percent.
New Shipping Route
China continues to work toward building major international corridors, streamlining customs clearance in markets related with the Belt and Road Initiative and expanding industrial capacity cooperation with other countries. For example, every week, three trains carry goods between Chongqing and the Beibu Gulf in the Guangxi Zhuang autonomous region, where the cargo is loaded onto ships bound for Singapore. The new Chongqing-Guangxi-Singapore route was opened in September to reduce logistics costs and promote trade with Southeast Asian countries under the Belt and Road Initiative.
Shipments take two days to go from Chongqing to the Port of Qinzhou in southern Guangxi, and another six days to reach Singapore. Compared with the traditional route via the Yangtze River through Shanghai, the new route, called the Southern Passageway, saves about 20 days. The new route also helps relieve heavy traffic on the Yangtze. Shipping volume through the locks at Three Gorges Dam was not expected to reach full capacity, 100 million metric tons a year, until 2030. However, that limit was reached in 2011, resulting in long wait times.
Under Guangxi’s plan to accelerate transport to Singapore, an integrated system will be in operation by 2020, focusing on the rail-to-sea route. Throughput at Beibu Gulf will reach five million containers, making the port an international shipping center.
Complex and Volatile
President Donald Trump signed an executive memorandum on Thursday that would impose retaliatory tariffs on up to $60 billion in Chinese imports. Earlier this month, China noted its solid trade developments with the caution: “Generally speaking, the national economy has maintained stable and sound development in the first two months of 2018 with new growth drivers fostered, making a good start for high quality development. However, we should be aware that international context is still complex and volatile...”