There is an old Chinese proverb, the literal translation of which reads: See the wind, turn the rudder. 

In its proper context it has a slightly disparaging meaning; suggesting an individual’s lack of commitment and tendency to be easily led by the tide of events.

But in light of continuing slow growth in its key European and US export markets, Chinese exporters are being forced to change course, seek new markets to keep factories churning, provide China’s 1.3 billion population with food on the table, and maintain GDP at a comfort level for the social unrest-fearing Beijing government. 

In fact, the latest figures from Container Trades Statistics (CTS) have confirmed what we half expected or feared; that the draconian austerity budget deficit-reducing measures induced by the European financial crisis had poured buckets of cold water over the appetite of consumers’ spending habits, that had hitherto driven China’s phenomenal growth to economic superpower. 

According to CTS, container volumes in May between Asia and Europe fell by almost 7%, versus the same month of 2011; but in the Mediterranean’s debt-ravaged bond rate-crippled nations the slump was more dramatic, at around 14% year-on-year. 

While the results are still to come on the success this year of the traditional peak season, it is hard to see how – given the current climate – the numbers for the summer months are going to be anything other than a big disappointment. 

So, China is checking the prevailing wind and steering the rudder towards new emerging markets in the developing world that have the hunger for Chinese manufactured goods that were once the staple diet of many European and American citizens. 

Indeed, at the TOC Container Supply Chain conference in Antwerp in June, several speakers suggested that with the east-west tradelanes currently in the doldrums a greater emphasis needed to be focused on routes such as intra-Asia, Asia-Latin America and Asia-Africa. 

It was a point well made by Mathijs Slangen, a senior analyst at the Netherlands-based consultant, Seabury Group. He told delegates: “Growth is being driven by the emerging markets, a clear tipping point has been in place since 2007, and emerging markets are continuing to see their share of world container trade increase.” 

Slangen backed up his argument with statistical data adding that the number of countries that China now trades with has doubled in the space of the past 10 years. 

Elsewhere, global expansion fuelled by the developing world was a topic that Maersk Line’s CEO for North Asia, Tim Smith, alluded to in an interview with the Wall Street Journal (WSJ) recently.

Smith told the WSJ that Maersk expected double-digit percentage growth from its Asia-emerging market trades this year; something he hoped would compensate the Danish carrier for sluggish cargo flows in its traditional transpacific and heavily-weighted Asia-Europe trades. 

Moreover, economists predict that if Chinese exports continue on their current trajectory, its trade with Latin America could soon overtake Europe as the Asian nation’s biggest trading partner.

It is not only Brazil that is increasingly ravenous for China’s goods; but also its South American neighbours Colombia and Peru, which have both posted huge year-over-year growth in imports from China. 

As one door closes, others open and the ability to find and access new markets is not only welcome news for the world’s second-largest economy it is also good news for the rest of the planet’s attempts to recover from the worst recession since the mid-30s: the developing world is the new driver.

What do you think? Tell Mike at [email protected] 

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