After a downturn in previous years (see “Commercial shipping in crisis as thousands of ships wait, anchored off the coast of Singapore,” in AsiaNews, 15 September 2009), container shipping rebounded last year, pushed by Asian exports towards the United States and Europe. However, high US unemployment and limited growth in Europe have reduced demand for Asian exports.
Singapore’s container throughput rose 3.8 per cent in November from a year earlier, less than a quarter of the pace in January. Container traffic in Hong Kong climbed 10.5 per cent in November, less than half the pace in January.
Slower growth in Asia is a sign of overreliance on exports-driven economic policies based on low cost goods. Despite hopes that things might continue as they were, decades-long dependence on exports can no longer be sustained.
Even considering the recent recovery, container shipping has not yet reached pre-crisis levels, and will continue to suffer from overcapacity.
Significantly, leasing costs for capesizes, 1,000-foot-long ships hauling iron ore and coal, are expected to drop 34 per cent to average US$ 22,000 a day this year, this according to the median in a Bloomberg survey of eight fund managers and analysts. Rates were last that low in 2002.
The economies of China, India and other Asian nations must grow if they want to lift hundreds of millions of people out of poverty and provide them with essential services.
However, many experts are of the opinion that export-driven growth cannot do the trick. If things stay the same, manufacturing in Asia is bound to decline, progressively but inexorably.
Alternatively, focus on domestic consumption could help in countries with populations in the billions.
Sea-cargo traffic in China, Vietnam, India and other emerging markets may grow 7 per cent annually until 2015 compared with a 2 per cent expansion in more mature economies. However, for now, 60 per cent of Asia’s exports are ultimately destined for the United States, Europe and Japan.
For change to occur fairer redistributive policies are needed. So far, economic growth has only helped small elites, leaving hundreds of millions of people by the wayside, especially in rural areas.