Chinese Ports Set to Choke Under Trade War Pressure
Growth at China’s busiest ports could come under sustained pressure if the trade war with the US continues for the next 12-18 months, according to ratings agency Moody’s.
Annual growth in container throughput could fall to almost 0% from the 4.7% it enjoyed in 2018 and 8.3% in 2017, with the total revenue and profit margins of China Merchant Ports Holdings, Hutchison Port Holdings and Shanghai International Port declining as well.
The US-China trade war has been ongoing since early 2017 and approximately US$400 billion in tariffs has been placed on goods between the two countries.
In the intervening months the Washington and Beijing have been in negotiations over a conclusion to the trade war, and also a long term trade agreement.
There were glimpses that an agreement might be likely, but they have been largely dashed for the time being after talks collapsed earlier in May 2019.
Speaking about the report, Moody’s analyst Ralph Ng was quoted in the South China Morning Post as saying: “We expect US-China relations to remain contentious and trade negotiations to continue for some time, even if the two countries reach a trade agreement, resulting in the difficult operating environment for China’s port sector.”