Shippers see China growth slow

Western shippers have reported slight declines in some orderbooks to China as the world’s most populous nation applies brakes to some construction projects in an effort to cool its red-hot economy.
China has been the bright spot for many breakbulk and project cargo shippers since the global recession hit in 2008. But in recent months Chinese orders from foreign suppliers have dropped in the wake of excess capacity in China’s wind, steel, construction and shipbuilding industries.
The good news is the slowdown is expected to be temporary, with most companies forecasting a return to regular Chinese demand by year’s end.
The first indication of the slowdown came last fall when ABB reported a 5 percent decline in third-quarter orders for power systems and process automation technology. Volvo also warned last year of a dip in Chinese demand for construction equipment, and the maker of Otis elevators reported fourth-quarter order growth declined from 20 percent in 2010 to 7 percent last year.
Last month, Siemens reported its Chinese orders dropped 16 percent in its fiscal first quarter, but company officials expect China to return to growth in the fourth quarter.
While Caterpillar reported a gain in market share last year, sales of new machines declined.
China’s GDP growth fell to 8.9 percent in fourth quarter 2011, the lowest since early 2009. This year’s GDP growth is forecast to barely top 8 percent, which by European and US standards is pretty healthy.
So don’t by worried by the fact that China is cruising toward a soft landing as its overly heated economy cools. It will prompt Chinese manufacturers to look at foreign markets, but in the long run, the world’s No. 2 economy still needs mountains of infrastructure and construction.