BREAKBULK CHINA COVERAGE – DAY TWO
By Eric Johnson
A new era of innovation is dawning in China now that the country’s manufacturers are no longer dependent on factory machinery imported from more advanced countries.
The fact that more Chinese manufacturers are using Chinese equipment rather than German or U.S.-made factory machines – the kind often imported by breakbulk carriers – is one reason why economist Billy Wong is guardedly upbeat about Greater China’s economic outlook.
Wong, principal economist for Greater China at the Hong Kong Trade Development Council, told a Breakbulk China 2017 audience Thursday he’s “bullish, but not too bullish” about the near-term trend.
China is seeing results from a government effort to upgrade industries by promoting innovation, Wong said. It’s also strengthening the service sector and replacing export-led growth with consumer-based economic expansion as part of the government’s so-called Made in China 2025 strategy.
This sharper domestic focus has likely affected the breakbulk sector by, for example, reducing demand for machinery imports. Wong called the ongoing changes a “transformation” for China’s economy.
Wong said the service sector has in recent years become more influential than manufacturing in China, as the former now accounts for more than 50 percent of gross domestic product. That figure is slated to rise to 56 percent by 2020.
As in years past, he said, China’s import and export trade growth is expanding at a faster rate than the global average. And the government’s current, five-year plan calls for more imports of “not just machinery but consumer goods.”
Wong noted Hong Kong’s cargo trade and overall economy are closely tied to mainland China’s, in part due to the “transshipment” of Chinese imports and exports through the Port of Hong Kong.
Beijing authorities expect China’s GDP growth rate to slip to around 6.5 percent this year from 6.7 percent in 2016.
Wong said he expects China to reach its growth target for 2017 given the government’s policy tools for steering the economy. On the other hand, he said, Hong Kong will remain on a slow growth track this year.
Photo: Billy Wong, principal economist for Greater China at the Hong Kong Trade Development Council, told a Breakbulk China 2017 audience Thursday he’s “bullish, but not too bullish” about the near-term trend.