China is Going to Dominate International Shipping in 2030. Just Ask Them.

Recently, the Shanghai International Shipping Institute released a detailed 2-year study called “China Shipping Development Outlook 2030” that ultimately projects China to be the top shipping nation in the world. This also includes owning the largest cruise market.

Here are a few highlights of this report:  

1. Demand: By 2030, China's total international shipping volume will reach 6.2bn tons, which will ultimately account for 17% of the world's shipping volume. 

2. Capacity: China expects to exceed Greece in terms of total fleet capacity by 2030.

3. Port: Container throughput at Chinese ports will reach 505m TEU in 2030 which includes an average growth rate of about 6%.

4. Shipping finance and insurance: China's ship financing will account for 30% of the world's volume.

5. Cruise: China is expected to be the world's largest cruise market with Chinese shipyards are expected to get about 11% of the world's cruise ship orders by the time.The China Shipping Development Outlook 2030 has even "drawn a blueprint for the medium term future of China's shipping industry" to help the country realize its international shipping dominance throughout the next 15 years.

Greg Knowler has highlighted some of the ways Shanghai International Shipping Institute's China Shipping Development Outlook 2030 advises China on the future of the international shipping industry in a Journal of Commerce (JOC) article about the research report:

This extensive report covers all areas of the country’s maritime industry and calls on the Chinese government to be clear-minded about what needs to be done, warning that industries against the general trend may eventually be eliminated.

The report notes “Enterprises will be faced with a more open shipping market, foreign capital will inevitably enter all areas of the shipping industry, and the monopoly-based interests enjoyed by some shipping and port sectors today will be affected by marketization,”

“Chinese enterprises sometimes hope the government would keep their foreign counterparts outside, but the government will no longer interfere in areas where resource allocation should be market-based.”

Knowler's article even shares how the report says the international shipping industry is on the brink of reform:“Looking toward 2030, we should realize that the current shipping industry is on the eve of a major reform. The continuous recession in the shipping industry that we’ve felt is the prelude to this upcoming industrial reform. Innovative enterprises that can adapt to the changes will embrace growth by blazing out a new path, whereas enterprises that stick in a rut may not see the day of recovery,”

The notion that the international shipping industry is on the brink of change should come as no surprise to anyone. Carriers have struggled to make money in recent years, even suffering losses in the billions of dollars.

Change has already begun in the international shipping industry with the trends toward megaships and carrier alliances to bring down costs for the world's giant shipping companies.

China's economic growth and in international shipping has dwarfed the growth of other countries, including the U.S., in terms of international trade in recent years.It will also not be all that surprising for the changes in international shipping to include China as the new leader of international shipping.

It has been noted that China has not maintained the mammoth economic and world trade growth of recent years. In fact, "China's export sales contracted 15 percent in March, a shock outcome that deepens concern about sputtering Chinese economic growth," according to a recent Reuter's article.

This report looks at China's import and export growth over the last 10 years and projects what that growth will look like in 2030. Knowler's JOC article summarizes it as follows:

The report found that China’s import and export of container cargo had increased at an average annual rate of 12.13 percent in the past 10 years and was expected to pass 200 million TEUs in 2030. But in 2030, the containerized imports and exports would slow to an average growth rate of 4-5 percent a year. Its international container trade will take a larger global market share, imports and exports would be more balanced, imports would increase faster than exports, and products with higher values would comprise a larger proportion of exports.