1. Martin Stopford China at a Turning Point
Market Overview
IFLOS Summer School, 2013
4/23/2017
Future of China & the maritime industry
Martin Stopford
President,
Clarkson Research
China at a Turning Point
The Trade Development Cycle & the One Belt One Road concept
The Chairman’s Forum, Looking Ahead From the City of London
Cass Business School, London 15th September 2015
Martin Stopford, Clarkson Research
Martin Stopford, 8th August 2012
Prof Martin Stopford, President, CRSL 1

2. Figure 1: World seaborne imports in 2014
IFLOS Summer School, 2013
Figure 1: World seaborne imports in 2014
China accounted for 41% of import growth since 2003
China
Martin Stopford, Clarkson Research
Martin Stopford, President CRSL

3. Figure 2: China’s seaborne imports and exports

4. Figure 3: China’s Industrial production growth
1992/3 Bubble
Post 1997 Asia Crisis Recession
Average14%pa
Source: industrial data from various sources

5. Figure 4: Typical “trade development cycle” peaking
Turning point
Value added growth
The trade development cycle (TDC) describes the import growth path of transitional economies
It has three stages:-
Stage 1: modest imports funded by primary exports
Stage 2: As the economy speeds up imports of raw materials grow rapidly
Stage 3: the volume of imports grows slowly
China seems to have reached turning point 2
China ? 1 2
For the shipping
industry the key
issue is the
timing of the two
turning points
Resource intensive growth
economy
undeveloped
Source: Maritime Economics martin Stopford (1997)
Stage 1
Early Industrial
Stage 2
Transitional
Stage 3
Mature

6. Trade development cycles 1950-2015: EUROPE
Imports M tonnes
There have been four waves of regional growth:-
Europe lead the way in the 1950s 1

7. Trade development cycles 1950-2015: JAPAN
Imports M tonnes
There have been four waves of regional growth:-
Europe lead the way in 1950s,
Followed by Japan in 1960 1 2

8. Trade development cycles 1950-2015: SE ASIA
Imports M tonnes
There have been four waves of regional growth:-
Europe lead the way in 1950s,
Followed by Japan in 1960
Asia in about 1975 1 2 3

9. Figure 5: Trade development cycles 1950-2015: CHINA
Imports M tonnes
There have been four waves of regional growth:-
Europe lead the way in 1950s,
Followed by Japan in 1960
Asia in about 1975
Chinese trade started to grow rapidly in 1994
The growth pattern was a slow start followed by rapid growth 1 2 3 4

10. Figure 5: Trade development cycles 1950-2015
Imports M tonnes
There have been four waves of regional growth:-
Europe lead the way in 1950s,
Followed by Japan in 1960
Asia in about 1975
Chinese trade started to grow rapidly in 1994
The growth pattern was a slow start followed by rapid growth 1 2 3 4

11. Future Trade Scenario: Challenging
IFLOS Summer School, 2013
Future Trade Scenario: Challenging
Average 3.5 tonnes/capita
1 billion OECD import 3.5 billion tonnes of cargo
Average 1.0 tonne/capita
6 billion Non-OECD countries import 6.4 billion tonnes of cargo
World Average 1.4 tonne/capita
Martin Stopford, Clarkson Research
Martin Stopford, President CRSL

12. Figure 6: China in the world maritime economy
Exchange rate
measure of world GDP
China is now 18-20% of population, GDP and sea imports
Big impact on trade growth
Big shipbuilding share
PPP measure
of world GDP
Share of world shipbuilding
China’s share of world total 2014/5

13. Figure 7 China’s import growth by commodity 1999-2014
Iron ore dominates
trade growth

14. Figure 9: Steel consumption per capita 2013
Source: World Steel Association “World Steel in Figures 2014”

15. One Belt, One Road – President Xi’s vision
Moscow
Khoigas
Bishkek
Almaty
Urumqi
Istanbul
Samarkand
Dushanbe
Tehran
Gwadar

16. Central Asia
Gwadar
Samarkand
Gwadar

17. Figure 10: China Silk Road ECONOMIC Belt
The economic belt will lop thousands of kilometres of the traditional sea routes for Chinese exports
It is a vital transport route for imports of oil, gas and other natural resources.
Source Gavekal/Dragonomics

18. Figure 11: China’s Silk Road MARITIME Belt
Improved connectivity between Asia and Europe, creating valuable new trade routes and boosting regional growth:
Measures to improve performance include
upgrade ports;
improved logistics; lower trade barriers;
financial integration 
Source Gavekal/Dragonomics

19. Eurasia Land Bridge photos: Tom Miller
Better connectivity will enable its underdeveloped border regions to become viable trade zones

20. Conclusions
China is moving from the transitional stage of development to maturity
There is surplus capacity in shipbuilding, steel and infrastructure development companies.
The Silk Road Economic and Maritime Belt might open up Central Asia & maritime Asia.
Shipping will benefit from better port and inland infrastructure within Asia, and economic development, making improved transport services possible.

21. Figure 12: The Westline – 5000 years of maritime trade
6. Hanseatic League
1400 AD: trade between N. W. Europe and the Baltic sea
12.
1970s S Korea
emerges as industrial power
7. Dutch 1650 AD: dominate sea trade
s China emerges as major power
Japan:
miracle economy leads shipping
8. England 1735:
merchant fleet overtakes Dutch shipping
: growing power of N. America as global trade hub
One Belt, One Road
5. Venice 1000: crossroads for East /West trade
4. Rome100 BC: dominates west Mediterranean
3. Greece 300BC
trade centres Corinth & Athens
2. Phoenicians: trade from Lebanon BC
1. Gulf:
3000 BC trade between India and Babylon
AUTO VERSION

22. Sea trade scenarios 2015-2065 1950-2014 4.8% pa growth 1865-1935
That works out at 1.1%-2.8% pa growth
Scenario A: 4.0 tonnes/capita
4.8% pa growth
Bulk, specialized, container shipping
3.5% pa growth
Liner & tramp shipping (pushing out sailing ships)
Scenario B: 1.9 tonnes/capita

23. Figure 8: China’s steel production & iron ore imports