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TPM Asia 2013 Mario Moreno Economist, JOC Shenzhen | October 17, 2013 THE COMPETITIVE BALANCE OF CHINA PORTS
TPM Asia 2013
Mario Moreno
Economist, JOC
Shenzhen | October 17, 2013
THE COMPETITIVE BALANCE
OF CHINA PORTS
SLIDE 2
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
CHINA-TO-US TRADE STILL
IN ANEMIC RECOVERY
PHASE
• US imports from China via ocean
container dropped as much as 20%
over 2008-2009
• US imports from China via ocean
container at below 2007 peak by 7%
• Despite swift government stimulus,
China ports did not escape global
malaise
• US experiencing subpar economic
growth, impacting imports 0
20
40
60
80
100
120
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
US Imports from China via Ocean
Container, Index 2007=100
DATA: PIERS
Recession
Dec 2001: China’s
accession to WTO
SLIDE 3
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
• Compared to SE Asia and Indian
Subcontinent (ISC), US imports from
China growing at slower rate
• US imports from ISC and SE Asia
reached new peak in 2010 and 2012,
respectively
• Square root recovery for China-to-
US trade
• Rising production costs in China
triggers source shifting – labor-
intensive exports most impacted
0
20
40
60
80
100
120
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
US Imports from China, SE Asia,
Indian Subcontinent, Index 2007=100
China
SE Asia
ISC
DATA: PIERS
Recession
UNEVEN RECOVERY FOR
ASIAN SUPPLIERS
SLIDE 4
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
• US footwear imports from China
struggle; down 16% from 2007 peak
• Footwear imports from Vietnam and
Indonesia way above prior 2007 peak
• Footwear imports from China up
14% in 1H13, BUT imports from
Vietnam and Indonesia up 40% and
52%, respectively
84.4
0
20
40
60
80
100
120
140
160
180
200
07 08 09 10 11 12
US Footwear Imports from China,
Vietnam, and Indonesia,
TEU Volume Index 2007=100
China
Vietnam
Indonesia
DATA: PIERS
CHINA’S EXPORTS OF
LABOR-INTENSIVE
GOODS STRUGGLES
SLIDE 5
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
CHINA EXPORT DATA REFLECTS NEW
DYNAMICS FOR PORTS Shenzhen in contraction; other ports
show resilience Hong Kong in contraction too
-3.8% -10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
2010 2011 2012 2013*
Top China Gateways for
Containerized Exports to US Annual Growth Rates
Shenzhen
Shanghai
Ningbo
Qingdao
DATA: PIERS.
2013*: Jan-Jun
-8.0%
-30%
-20%
-10%
0%
10%
20%
30%
2008 2009 2010 2011 2012 2013*
Containerized Exports to US via
Hong Kong Port Annual Growth Rates
DATA: PIERS.
2013*: Jan-Jun
SLIDE 6
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
SHENZHEN HIGHLY
EXPOSED TO EXPORTS OF
MAJOR CONSUMER GOODS
• 45% of all exports to US via Shenzhen
in 2012 were consumer goods*, down
from 49.4% in ‘07; AND total export
volume to US down 20% from 07
• 24.5% of all exports to US via
Qingdao in 2012 were consumer
goods*, down 3% from ‘07, BUT total
export volume to US is up 12% over ‘07
• 40% of all exports to US via Ningbo in
2012 were consumer goods*, up 3.5%
from ’07; AND total export volume to
US is up remarkably by 46% over ‘07 -4.4%
0.0%
3.5%
-3.0%
Shenzhen Shanghai Ningbo Qingdao
Changes in China Ports Shares of
Major Consumer Goods* Exports to
US by TEU Volume, 2012 over 2007
DATA: PIERS.
*Furniture, footwear, apparel &
accessories, handbags & wallets
SLIDE 7
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
TOTAL CHINA-TO-US CONTAINERIZED TRADE
BY PORTS: Market Share Changes Top 5 ports held 83% of all US-bound
container traffic in 2012, up 8% from 2007
Shenzhen holds steady, but Shanghai,
Ningbo, Qingdao gain
Shenzhen
31%
Shanghai
25% Ningbo
7%
Qingdao
6%
Tianjin
6%
Others
20%
2007
DATA: PIERS
Shenzhen
31%
Shanghai
27%
Ningbo
11%
Qingdao
8%
Xiamen
6%
Others
17%
2012
DATA: PIERS
SLIDE 8
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
SHENZHEN STRUGGLES
• Trend: DOWNWARD
• In 2012, 45% of all China exports to
US via Shenzhen were major labor-
intensive consumer goods, down from
49.5% in 2007
• Shipments from Shenzhen to decline
0.9% in 2013
-
100
200
300
400
500
600
700
800
900
1Q
02
1Q
03
1Q
04
1Q
05
1Q
06
1Q
07
1Q
08
1Q
09
1Q
10
1Q
11
1Q
12
1Q
13
1Q
14
China Exports to US via Shenzhen In Thousands of TEUs
Actual Forecast
Fitted model developed by JOC economist
Mario Moreno based on PIERS trade data
SLIDE 9
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
MID COAST, NORTHERN
PORTS APPEAR TO BE
HOLDING UP
• Trend: UPWARD
• In 2012, 40% of all China exports to
US via Ningbo were major labor-
intensive consumer goods, up from
36.3% in 2007
• Shipments from Ningbo to grow
6.7% in 2013
-
50
100
150
200
250
300
1Q
02
1Q
03
1Q
04
1Q
05
1Q
06
1Q
07
1Q
08
1Q
09
1Q
10
1Q
11
1Q
12
1Q
13
1Q
14
China Exports to US via Ningbo In Thousands of TEUs
Actual Forecast
Data provided by PIERS. Fitted model
developed by JOC economist Mario Moreno
SLIDE 10
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
• Machineries include computers,
heaters, TV sets, etc
• US imports from China stood above
prior 2007 peak in last 2 years
• US imports from Taiwan, Malaysia
struggle; more than 20% below 2007
peak
• US imports from China and
Malaysia up modestly by 1% in
1H13; from Taiwan down 10%
107
0
20
40
60
80
100
120
07 08 09 10 11 12
US Machineries Imports from China,
Taiwan, and Malaysia,
TEU Volume Index 2007=100
China
Taiwan
Malaysia
DATA: PIERS
HS codes 8400 through 8599
Recession
DIFFERENT TREND FOR
CAPITAL-INTENSIVE
GOODS
SLIDE 11
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
• Mexico gains presence in auto parts
sourcing to US, so does China
•Auto parts imports from Mexico at
60% over prior 2007 peak
• US auto parts imports from China at
79% over prior 2007 peak
• US imports from China up 8% in
1H13
160
179
0
20
40
60
80
100
120
140
160
180
200
07 08 09 10 11 12
US Auto Parts Imports from Mexico
and China by Dollar Value
Index 2007=100
Mexico
China
DATA: US International Trade Commission.
HS code 8708
DIFFERENT TREND FOR
CAPITAL-INTENSIVE
GOODS (CONT’D)
SLIDE 12
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
• Wage hikes, go West driving cargo inland, and out of China
• Contraction at Shenzhen, high growth at mid-coast and northern
ports illustrates changes
• Policy is to lessen dependence on low-value exports, rebalance
economy, keep people closer to home; still a work in progress
• But this is a trickle, not an exodus as China has far superior
infrastructure than other emerging competitors in Asia
FINAL REMARKS
SLIDE 13
Mario Moreno, Economist, JOC | TPM Asia 2013
Shenzhen | October 17, 2013
THE COMPETITIVE BALANCE
OF CHINA PORTS
Thank you!
@MarioMoreno_JoC/twitter.com
