Following the celebration of Chinese New Year, we are now in the Year of the Snake. In December 2001, during the previous Year of the Snake, China joined the World Trade Organisation, and a lot has changed since then both within China and in terms of world seaborne trade. Just how big an influence has China's increased role in international trade had on seaborne volumes in the intervening years?
The graph shows global tonnage growth in five of the largest seaborne traded cargoes, 2001-12, in net terms (some countries’ trade declined), split to illustrate China's volume expansion. Its impact is remarkable.
More and More Ore
Unsurprisingly the largest absolute growth in China’s tonnage volume has been in iron ore. As China's industrial boom has driven its steelmakers’ hunger for imported ore, Chinese import volumes have grown by 631 mt out of a total global expansion of 661 mt. That’s equivalent to a whopping 96% of the total, and China's demand is still growing today.
China's power generation has also grown rapidly. This has driven demand for imported coal, with China swinging from being a net exporter of coal to a highly significant net importer today. In the period 2001-12 world seaborne coal trade grew by 485 mt, with China's absolute volume growth of 171 mt, 35% of the total.
Snake and Oil Sales
In the oil trades the picture is also clear. Of total expansion in crude oil trade during the period of 191 mt, China's import demand, driven by significant expansion of refinery capacity, grew by 187 mt, 98% of the net total. However, with refinery expansion generating demand for crude, the impact on products has been much less pronounced.
World Workshop
In containers, with China having taken the role of the workshop of the world it makes more sense to look at exports. Since 2001 global container trade has increased by 851 mt, and in terms of exports China's contribution expanded by an estimated 280 mt, equivalent to a third of the total as western economies have become increasingly reliant on Asian production of consumer goods and intra-Asian trade has thrived.
Step Up The Ladder
Aggregating across the commodities featured in the graph (which account for two-thirds of global seaborne trade), China has been responsible for a massive 51% of the 2.5 bt growth. That’s total expansion of 1.3 bt, equivalent to almost an extra tonne per head of the Chinese population. And that doesn’t include the growth in Chinese demand for a range of other commodities, or China’s role as an importer of containerised goods and components from within Asia.
The next Year of the Snake will be in 2025. By then a lot will surely have changed again. However, if China or any other economy has this kind of impact on seaborne volumes in the interim then shipowners will have good reason to be thankful.