Abstract
According to Bloomberg, Chinese airlines registered an 11% year-on-year
(y-o-y) decline in cargo traffic
to 1.22mn tonnes in January-April 2009,
and a 3.7% y-o-y decline in April 2009. However, the country’s
airlines recorded a 14% y-o-y rise in passenger numbers to 71.37mn in
January-April 2009, and a 13%
y-o-y rise in April 2009. Industry observers
believe the reduction in cargo traffic is mainly due to a
slowdown in
demand for goods as a result of the global financial downturn.
China’s economy continues to grow, albeit at a slower rate, driving
trade and demand for freight
transport. Our latest estimates put GDP
growth down to 6.8% in 2009, gaining to 7.6% in 2010. China’s
foreign trade will dramatically reverse from 21.8% growth in 2008, with a
contraction of 10.5% in 2009,
before recovering with 16.9% expansion in
2010. Despite this year’s pause, the resumption of doubledigit
trade
growth next year will continue to increase demand on the country’s
transport and infrastructure
capacity. Underpinning the optimistic outlook
is a supportive operating environment. BMI has given
China’s freight
industry a rating of 60.6 (out of a theoretical maximum of 100), which places
it right up at
the top of the Asia Pacific region.
Based on available
data, we have reduced rail freight and river/sea cargo growth. Our forecast
for freight
carried across all modes in 2009-2013 now stands at 6.5% per
annum (pa). According to our latest
estimates, transport and
communications (T&C) GDP rose by 10.8% in 2008, 1.8 %-age points (pps)
faster than overall GDP, which we estimate will have expanded by 9%. For the
2009-2013 forecast
period, we expect the T&C sector to continue outpacing
the economy as a whole. It will achieve average
annual growth of 8%,
versus 7.1% for overall GDP. The total value of T&C GDP will rise to
US$402.1bn
in nominal terms by 2013, representing 6.3% of China’s
GDP. The T&C sector employed 22.28mn
people, or 2.7% of the labour force,
in 2008. We see the figure rising to 23.4mn by 2013.
Despite current
conditions, prospects for the freight transport industry remain encouraging.
The freight
sector will grow at a slower rate than the economy as a whole
for the next five-year period, dragged down
by the current recession, but
longer-term we expect it to get back out in front. This is in line with
intensifying demand for transport at this stage in the Chinese economy’s
development. By transport
mode, growth will be led by oil and gas
pipelines (at an average rate of 20.7% a year), air freight (8.4%),
road
haulage (7.8%), rail freight (also 7.3%), and shipping and inland waterways
(5.1%).
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