Trans-Pacific Freight Rates
Rates on the trans-Pacific trade from Asia to North America are starting to resemble the Asia-Europe and may hit three-digit numbers for spot rates for 40-foot containers moving from China-based ports to Los Angeles and Vancouver. I can’t recall seeing rates go this low.
This recent period of lackluster import volumes will continue until traffic picks up in the summer-fall peak-shipping season.
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China’s Economy
China is facing a financial crisis similar to the one the U.S. experienced a few years ago. China’s growth is being driven by debt, something that is unnervingly similar to the U.S. economy a decade ago before credit markets dried up and sparked a global recession.
However, Beijing’s moves to stabilize its economy have temporarily eased global fears tied to the world’s No. 2 economy. China’s GDP rose 6.7 per cent in the first quarter from the previous year, a level within the government target for this year, and officials say key indicators are better than expected.
Economists are concerned over the sustainability of recent growth. They say it has been driven by the old-fashioned way – through property investment and infrastructure construction – and that the increase of credit will add to an already heavy corporate debt load.
George Soros now says China is facing a financial crisis similar to the one the U.S. experienced a few years ago. Soros added that China’s growth is being driven by debt, something that is unnervingly similar to the U.S. economy a decade ago before credit markets dried up and sparked a global recession. (Source: “Soros Says China’s Economy Looks Like the U.S. Before the Crisis,” Bloomberg, April 21, 2016.)
China’s state-run media outlets have blamed Soros’ comments for lowering investor confidence in the country, which led to a sharp decline in markets earlier this year.
