Shipbuilding, consumption, trade all show strong signs of a pickup in Q4

On Sept 12, the Emden, South China's first dual-fuel pure car truck carrier, a giant-sized, purpose-built ship, was delivered for use at a ceremony in Guangzhou, capital of Guangdong province.

Built by Guangzhou Shipyard International Co Ltd and China Shipbuilding Trading Co Ltd for Norway's SFL Co Ltd, the vessel can carry 7,000 vehicles at one go.

"We have already received more than 50 export orders, with the production plan scheduled into 2027," said Liu Hui, chief accountant and chief legal counsel of Guangzhou Shipyard International.

In the first half of this year, the company's newly received orders increased by 90 percent year-on-year, GSI data showed.

Located at the mouth of the Pearl River, GSI, a subsidiary of China State Shipbuilding Corp, is one of the major shipbuilding bases in the country. With an annual shipbuilding capacity of 4 million deadweight tons, the company has received a large number of orders from countries involved in the Belt and Road Initiative such as Algeria and Greece.

In April, the world's largest luxury roll-on/roll-off passenger vessel, built by GSI for Italy's Moby Line company, set sail. The vessel, dubbed the Moby Fantasy, is designed for more than 2,500 passengers and 800 vehicles.

During the past few years, GSI witnessed a significant jump in its output value, rising from 6 billion yuan ($820 million) in 2018 to 12.9 billion yuan in 2021, with its core business reporting 25 million yuan in profits.

Data from the Ministry of Industry and Information Technology reflected the official snapshot of the sound development of China's shipbuilding industry in the first half of this year, with double-digit increases in output, new orders and holding orders.

The country's shipbuilding output hit 21.13 million dwt during the period, up 14.2 percent year-on-year and accounting for 49.6 percent of the world's total.

New orders, another major indicator of the shipbuilding industry, jumped 67.7 percent year-on-year to 37.67 million dwt, with a global market share of 72.6 percent.

The sector's holding orders totaled 123.77 million dwt at the end of June, expanding 20.5 percent year-on-year for a 53.2 percent share of the global market.

Liu said the improvement in the sector is largely due to the flourishing maritime industry, the BRI and the country's solid steps to foster high-quality development of the manufacturing sector.

He also said the past few years witnessed a surge in market demand for car carriers, thanks to the growth of global auto trade, especially China's booming auto exports. And GSI has grabbed the opportunities — 25 orders for car carriers — with both hands.

In fact, the strong performance of China's shipbuilding sector is seen bolstering not only foreign trade but economic growth.

When it comes to certain issues faced by the shipbuilding sector like financing difficulties, the ExportImport Bank of China has provided full support to GSI, covering over 80 percent of the latter's financing. In the past three years, the Export-Import Bank of China has provided GSI a cumulative financing of 19.7 billion yuan, Liu said.

The Export-Import Bank of China, a major policy bank, is dedicated to supporting the country's foreign trade, investment and international economic cooperation. During the first five months of this year, it issued over 730 billion yuan in loans to support the country's foreign trade, up 15.8 percent year-on-year, the bank said.

At the end of May, the bank's outstanding loans to foreign trade firms came in at nearly 3 trillion yuan, up 16.36 percent year-on-year and an increase of 130 billion yuan compared to the beginning of this year. Its Belt and Road outstanding loans topped 2.2 trillion yuan at the end of May.

Looking ahead, the bank said it will continuously ramp up efforts to promote high-standard opening-up and drive high-quality development in foreign trade.

The latest data from the General Administration of Customs showed that China's January-September foreign trade fell 0.2 percent year-on-year to 30.8 trillion yuan.

Exports grew 0.6 percent year-on-year to 17.6 trillion yuan, while imports declined 1.2 percent to 13.2 trillion yuan.

Zhou Maohua, an analyst at China Everbright Bank, said the latest figures showcase the resilience and stability of China's economy amid downward pressures from slowing global demand and a cloudy global outlook.

"The proportion of high-tech exports, especially machinery and electrical products, has steadily increased," Zhou said. "Private enterprises have become a major force in China's exports. And exports to BRI countries and ASEAN markets have witnessed rapid growth … The figures point to the continuous optimization of China's foreign trade structure and the gradual strengthening of new growth drivers."

China's trade with BRI countries rose 3.1 percent year-on-year to 14.32 trillion yuan between January and September, accounting for 46.5 percent of its total foreign trade value during the first nine months, Customs data showed.

Zhou forecast that China's foreign trade will gradually improve amid a recovery in domestic demand and policies to stabilize foreign trade taking effect gradually.

In September, China's total exports and imports increased steadily and registered the highest monthly figures for this year. Foreign trade reached 3.74 trillion yuan last month, registering positive month-on-month growth for two consecutive months and the highest monthly figure for this year, according to the GAC.

Jin Ruiting, a researcher at the Institute for International Economic Research of the Chinese Academy of Macroeconomic Research, said while major economies face mounting downward pressures, China has maintained stable performance in foreign trade. And as the Regional Comprehensive Economic Partnership enters a new stage of implementation, China's increasing trade with other RCEP members will boost the country's foreign trade and high-quality development, Jin said.

Despite facing downward pressures and difficulties, Jin took a rosy view of China's economic prospects. "With a population of over 1.4 billion and the world's largest middle-income group, China has a complete industrial system as well as an ultra-large domestic market."

The latest economic data have already showcased fresh signs pointing to a steady economic recovery. For instance, China's official manufacturing and nonmanufacturing purchasing managers indexes both improved in September to 50.2 and 51.7, respectively, from 49.7 and 51 in August. The figures were above the 50-point mark that separates contraction from growth.

Meanwhile, China's consumer prices remained flat while the decline in its factory-gate prices further narrowed in September, indicating still-weak domestic demand amid signs of stabilization and shoring up the case for further steps to bolster the economy.

Considering the continued recovery trend and strong policy support, Zhou from China Everbright Bank said China's economic growth will likely pick up in the fourth quarter, adding the country is capable of meeting its annual growth target of around 5 percent this year.

To further stabilize the overall growth, more efforts are needed to strengthen the coordination between fiscal and monetary policies, stabilize the housing market, further spur the consumption of big-ticket items and better implement policies rolled out recently to stabilize foreign trade, he said.