Home' Trinidad and Tobago Guardian : November 1st 2015 Contents NOVEMBER 1 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
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merge them to save money, and aims to stamp out
corruption at Cosco which, according to internal
documents leaked this week, is another reason for
its poor performance.
The hardest hit, however, will be the smallest con-
tainer lines that do not enjoy state backing. Several
smaller Japanese and South Korean operators, in par-
ticular, are sailing close to bankruptcy, analysts say.
The pressure to cut costs also is hitting container
lines suppliers: Several shipping-services firms in
Denmark and container-logistics firms in Britain
have gone bust in the past year.
The move toward ever-bigger vessels poses a risk
to ports which lack the capacity to handle them.
International trade is shifting toward big, centralised
hubs. Smaller ports, somewhat like smaller airports
when the hub-and-spoke model for long-haul flights
became dominant, are losing many of their direct
connections. This already has happened in Portland.
Oregon, which no longer is served by any regular
To avoid this fate, port authorities in some countries
are now investing heavily in upgrading their infra-
structure to handle larger vessels. Recent development
projects in Liverpool and London already have brought
traffic back to those British ports. In a similar vein,
earlier this month Indonesia announced details of a
US$3.6 billion project to upgrade its container ports
to ensure that it does not lose routes to Singapore,
the nearest big hub.
As falling volumes and weak shipping rates force
the industry to consolidate, with fewer, bigger lines
sailing ever-larger ships to fewer, bigger ports, the
resulting gains in efficiency should mean cheaper
transport costs, bringing benefits for consumers in
many places. That is, unless the consolidation goes
too far and the surviving lines are able to jack up
The 2M alliance now controls more than 28 per
cent of global container-shipping capacity, and almost
a third on the Europe-to-Asia route.
Regulators already are worried about the impact
on competition. In June 2014 the Chinese authorities
vetoed plans for a larger alliance, called P3, that would
have involved all three of the world s biggest lines.
Cheaper container rates are a boon for firms engaged
in international trade, and for their customers, but
there is a risk that the benefits will not last.
In this Tuesday, August 11, 2015 photo, a
bank clerk counts Chinese currency notes
at a bank outlet in Huaibei in central China s
Anhui province. China s unexpected deval-
uation of its currency in August raised fears
that the world s second-largest economy
was slowing more than anyone had thought.
China s leaders on Thursday affirmed plans to
double the size of the country s economy by 2020
from 2010 levels, a goal that sets up a potential clash
with efforts to nurture more self-sustaining growth.
Communist Party leaders are struggling with con-
flicting goals of pushing ahead a painful economic
restructuring and preventing growth that declined
to a six-year low of 6.9 per cent last quarter from
falling too low, leading to potential job losses and
Thursday s pledge followed a meeting aimed at
crafting a development plan for the rest of this
decade. Such Soviet-style five-year plans are a
throwback to central planning but guide official
policy and highlight party goals.
In a statement carried by the official Xinhua News
Agency, party leaders affirmed plans to develop a
consumer economy and promote technology to
replace a worn-out model based on trade and invest-
It gave no annual growth target. But doubling the
size of the economy in one decade would require
annual growth to average seven per cent. That is in
line with previous party promises but higher than
forecasts by the International Monetary Fund and
private sector analysts, who expect growth to slow
to six per cent or lower by 2017.
Economists warned in advance that enforcing
high growth targets could require Beijing to resort
to stimulus spending or other government inter-
"Policymakers will struggle to meet such high
targets without undermining progress elsewhere,"
Julian Evans-Pritchard of Capital Economics said
in a report last week.
Growth in the world s second-largest economy
has decelerated steadily since 2010 as Communist
leaders clamped down on an investment boom and
tried to encourage consumer spending and service
An unexpectedly sharp downturn over the past
year prompted Beijing to respond by cutting interest
rates six times since last November and stepping
up spending on public works construction.
Private sector analysts question the official figures
and say real growth this year might be as low as
four per cent.
Thursday s statement also promised to push ahead
reforms aimed at giving market forces a bigger role
by reducing the number of products whose prices
are set by the government. AP
China plans to double size of economy
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