According to Brian Jackson, senior economist at IHS Markit Beijing, China will leap from representing one-third of total consumption in Asia to two-thirds over the next 20 years.
“Even though China’s slowing down, it’s completely impossible to ignore it, no matter what part of Asia’s economy you’re looking at; consumption, trade, and even industry,” he told delegates at TPM Asia in Shenzhen last week.
He added: “Industry is the biggest part of China’s slowdown at the moment but it still accounts for two-thirds industrial output in Asia.”
He said industry was still growing faster than trade, despite the slowdown, and that this industrial growth was focused on domestic consumption in China.
“By comparison, we see industry in ASEAN growing slower than trade. There’s very rapid import growth for processing domestically and then exporting the processed manufactured goods, especially to China.
“It is the number-one reason why Vietnam is growing so quickly, for example, and yes the US is a large source of demand – but another very large source of demand is China.
“China is the first or second-largest source of exports for most ASEAN countries. Chinese consumption is going to be a major boom for these economies and drive faster-than-average export growth.”
The opposite is the case in China, according to Mr Jackson, because consumption is causing imports to grow much faster than exports.
He said that despite the focus on domestic consumption and services, in recent years China had signed a number of free trade agreements and was “very much one of the strongest proponents of free trade in the world at the moment”.
He added: “China is also going to be more and more open to the idea of import consumption because the government doesn’t like the idea that it has tens of millions of people going abroad and spending around $150bn on retail sales every year.”
Chinese retailers are being encouraged to import goods and sell them locally, as the government would prefer to create retail jobs domestically rather than in Singapore or Hong Kong.
Michel Looten, maritime director at Seabury, said that while China’s trade had slowed significantly, it remained the “backbone” of the container industry, and stressed, like Mr Jackson, that imports were likely to continue rising.
“It’s something we can’t stress enough – in container shipping it’s all about China,” said Mr Looten.
“China is a heavy lifter in terms of GDP, population and, especially, in ocean trade; its relatively low share of container imports indicates opportunities for further growth.”
He said one in every two teu transported globally had touched China in 2015. The country accounted for 32% of global container exports last year and its imports of 12.9m teu represented 10% of global container volumes.