Chinese economy continues to be in doldrums and the slowdown in Chinese growth has global impact and several potential downsides. We visit Shanghai, China’s biggest city and the global financial hub, to find out how the city is dealing with economic slowdown.
The Chinese economy has not been in the best of health for a while. According to several reports based on the data released for each month on manufacturing and other key economic parameters, a rebound in economic momentum is not expected very soon. However, that has not weakened the optimism of global companies in Chinese consumers and China’s key cities like Shanghai.
On June 16 American entertainment giant Disney will open its sixth theme park, Shanghai Disney Resort, Disney’s first on mainland China and the fourth outside the US after Paris, Tokyo and Hong Kong. The $7.65 billion Shanghai Disneyland, spread over 390 hectares is three times the size of the one in nearby Hong Kong. The American giant is hoping its popular franchises will appeal to a booming Chinese middle class in a country where it has been generating an increasing share of its box office revenue.
Ahead of Shanghai Disney Resort’s opening Chinese billionaire Wang Jianlin, founder of Wanda group, has opened its first theme park Wanda City, in south-eastern Nanchang. And Jianlin plans to open similar ones across China giving a tough competition to the American giant. The project represents an investment of $4.7 billion.
Shanghai is China’s largest centre for trade, finance, high tech industries and business services. However, for China in general and Shanghai in particular the sentiments are mixed.
According to a recent report, the world’s top makers of luxury goods are reeling as the appetite for their high-priced products has seemingly evaporated, and a major reason for the decline is the weak demand in the Chinese marketplace. “And it’s difficult to look at luxury’s rough patch without zeroing in on China – a country widely considered to be one of the world’s largest purchasers of high-priced goods and whose recent economic slowdown just so happens to coincide with earnings shortfalls among the world’s biggest names in luxury,” said the report.
For the global logistics company Dachser, the revenue contribution from Asia was positive. Dachser recorded a 9.2 percent increase in its Asia Pacific revenues to €367m for 2015, when compared to the year before. The overall number of air freight and ocean shipments in Asia Pacific increased slightly to 355,800 from 355,600.
“Despite the general slowdown in Asia Pacific markets in 2015, we were able to continue revenue growth through improved utilization of resources and becoming more efficient in managing our operations,” said Edoardo Podestá, Managing Director Air & Sea Logistics Asia Pacific for Dachser.
“The developments in China’s economy had a ripple effect across Asia which impacted both air freight and ocean, but we have a good network of offices across the region and a growing customer base which provides us with a good platform for the future,” he added.
Dachser opened its first warehouse in Shanghai in June 2007. Today, Dachser Shanghai provides contract logistics services in four different warehouses within the Shanghai area with a total of 27,000 sqm.
Shanghai’s largest air cargo terminal has continued its solid volume growth of 2015 into the first quarter, handling record year-over-year throughput from January to March. March cargo volume at Shanghai Pudong International Airport Cargo Terminal (PACTL), rose almost 7 percent compared with the same month last year and the 142,297 tonnes that crossed its busy apron helped lift first-quarter traffic to 367,791 tonnes, up 1.5 percent. It was the strongest results in the month of March and in the first quarter of any year in the Sino-German terminal’s history.
IAG Cargo has announced its network expansion and Shanghai is one of the key destinations that would be connected with its hub in Madrid.
Shanghai also hosts China’s key initiative of the China Free Trade Zone and has four customs supervision areas: Shanghai Waigaoqiao Bonded Zone, Waigaoqiao Bonded Logistics Zone, Yangshan Bonded Port and Shanghai Pudong Airport Free Trade. This is a strategic initiative aimed at promoting trade and investment to further open up the Chinese economy to the world. China seeks to improve the efficiency of customs supervision, enhance support investments to cultivate an internationalized business environment, and promote the liberalisation of its currency. The special economic zone also aims to open up service sectors, promote a friendly foreign investment environment, develop “a headquarter economy”, and implement new trade forms.