China to Have Greater Impact on Shipping than Brexit and Trump
One Belt, One Road initiative will be key driver of global trade, says Clarksons Research
According to MANA, DESPITE concerns over Brexit and US president Donald Trump's policies, Chinese president Xi Jinping's ambitious One Belt, One Road infrastructure initiative will likely overshadow both factors in terms of impact on global trade and subsequently the shipping industry, said Clarksons Research managing director Steve Gordon at the Singapore Marine Insurance Conference 2017 held during Singapore Maritime Week.
He noted that UK only took up about 1% of global shipping, while the US held a 6% stake.
Hence, "trade will be impacted by the Chinese economy and policy."
Mr Gordon said that funds totalling $160bn have been established so far anf total investment in projects related to the initiative could reach as much as $4trn-$8trn, "if all possible projects go ahead."
There are currently around 900 OBOR-related projects either being negotiated or already in progress.
"OBOR may boost Chinese imports of machinery and high-tech manufactured goods, supporting multipurpose shipping and heavylift sectors," he said.
Infrastructure investments to create the needed logistics networks in 60 countries across Eurasia, the Middle East and Africa, "may boost demand for raw materials, supporting dry bulk imports."
Mr Gorden noted that port development initiatives in China as well as in nations along the Maritime Silk Road will inevitably boost containerised trade and broaden the container network.
Additionally, "the promotion of tourism along the [Maritime Silk Road]...may support additional cruise demand in Asia."
As such, the world-spanning infrastructure initiative will potentially have a substantial impact for the shipping industry, he said.
This is in line with Clarksons Research's view that Asia and the developing world have been and will continue to drive seaborne demand.
According to its estimates, the Asia region had a 57% stake in seaborne imports over 2016, while Europe, North America and other regions comprised the rest.
From a historical perspective, Asia and other regions saw global seaborne imports grow from about 3.5bn tonnes in 2001 to over 8bn tonnes by end-2016.