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China’s shipping industry is grappling with a recession caused by waning demand and higher costs, and many small businesses are facing bankruptcy, the Ministry of Transport said Thursday.
In the first six months, turnover at ports increased 7.2 percent year on year to 4.74 billion tonnes, 6.1 percentage points lower than the growth rate in same period last year. A drop in domestic traffic was to blame, according to figures released by the ministry at a press conference.
Container traffic at those ports expanded 8.8 percent to 84.59 million TEUs, 4.3 percentage points lower than the same period a year ago.
The slowdown in the shipping industry reflects the macro-economic operation, said He Jianzhong, spokesman of the ministry.
China’s economy cooled to 7.6 percent in the second quarter, the lowest reading since the third quarter of 2009, as a result of sluggish exports, the domestic property market and its self-geared slowdown of fixed-asset investment.
Qinhuangdao Port on China’s northern coast, the nation’s coal-shipping center which is also seen as a barometer of the economy, should have experienced a busy July, as daily transport capacity was at least 50 vessels per day in the past. However, only one-quarter of that capacity was achieved this July, and inventories hovering near the maximum storage capacity piled up.
He attributed the overstock to less demand caused by a slowdown of electricity consumption, the overall economy and falling import prices.
Concerned logistic departments should team up to de-stock, but the fundamental way to sort out the problem is to spur the economy and boost demand, He said.