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Cargo flows through Chinese ports increased at the slowest pace in August since the beginning of this year, providing fresh evidence of the woeful state of China's export sector as well as its stalling economic expansion, which has put a dent in the country's demand for bulk commodities.
Chinese ports, the world's busiest, handled a total cargo volume of 792 million metric tons in August, up 2 percent from the same period last year - the lowest increase since the beginning of this year, according to the Ministry of Transport.
In the meantime, Chinese ports' container throughput reached 15.11 million twenty-foot equivalent units in August, up 3.9 percent from the same period last year, official data showed. This is much slower than the 7.9 percent year-on-year container-throughput growth rate averaged over the first seven months of this year, according to the ministry.
Industry analysts blamed the weak growth on the country's troubled export sector, which has had a rocky time in recent months because of the sluggish world economic recovery that has adversely affected global demand for Chinese products.
Analysts added that China's economic slowdown has further compounded the problem, leading to a sharp decline in the country's demand for coal, crude oil and other bulk commodities, and putting downward pressure on the ports' cargo flow increase.
"The difficult situation (with China's trade growth) is a long-term problem," said Zhang Yansheng, a trade expert and secretary-general of the Academic Committee of National Development and Reform Commission, China's top economic planning agency.
"No substantial recovery in either domestic or external demand will come about within the next few years."
Chang Dechuan, group chairman of China's Qingdao Port (Group) Co, agreed with Zhang about long-term trade problems.
"China's trade growth is likely to remain weak for the next two to three years. And for this year, the second half might be even more difficult than the first," Chang said in a recent interview.
"Chinese ports and shipping companies should brace themselves for uncertainties in the world and domestic economies," he added.
A modest increase in cargo volume, a dim prospect for future recovery, and steadily increasing costs in labor and elsewhere in the shipping industry have prompted concerns.
Zhang Liang, an analyst with GF Securities Co Ltd, said some ports may see their profits decline in the third quarter of this year from a year ago.
"As China's investment increases stall and factories scale down their production, the declines in bulk commodity imports are expected to continue," Zhang said.
"So ports that centered on handling bulk commodities are likely to see a dent in their throughput, while those that concentrated on containers may increase their profits as trade volume picks up," he added.
China's exports increased by 7.1 percent during the first eight months from a year earlier, registering one of the lowest increase rates since the 2008 world recession, according to the General Administration of Customs.
Meanwhile, China's industrial output increased at its slowest pace in three years, and the rate of increase for fixed-asset investment, excluding investment in rural households, was lower than expected in the first eight months of the year, according to the National Bureau of Statistics.
(China Daily 09/25/2012 page14)