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China Freight Transport Report Q4 2009
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. The report 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%).
China Freight Transport Report Q4 2009: http://www.companiesandmarkets.com/r.ashx?id=579R6K161155538
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