China - Transport and Logistics: Government initiatives to drive growth (Strategy, Performance and Risk Analysis)
China boasts an extensive transportation network. The country has recorded growth in the volume of vehicles and freight and is anticipated to increase its road network accordingly. China has the world’s fourth-largest road network - 4.8 million km in 2017, while the rail network stood at 137,901.6 km. The country is a major international transportation hub, housing the world’s largest sea port in Shanghai.
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Increasing international traffic to drive air freight
In China, air freight traffic recorded a CAGR of 8.0%, from 15.6 billion tonne km in 2012 to 22.9 billion tonne km in 2017 and is anticipated to post a CAGR of 7.7%, from 24.8 billion tonne km in 2018 to 33.4 billion tonne km in 2022. Growth in the volume of goods carried leads to higher freight traffic. Total air freight volume recorded a CAGR of 4.2%, from 5.5 million tonnes in 2012 to 6.7 million tonnes in 2017 and is anticipated to post a CAGR of 4.1%, from 7.0 million tonnes in 2018 to 8.2 million tonnes in 2022.
Decline in coal shipments affects rail freight
In China, rail freight recorded a CAGR of -6.0%, falling from 2,918.7 billion tonne km in 2012 to 2,140.0 billion tonne km in 2017 and is anticipated to post a CAGR of 6.7%, from 2,013.4 billion tonne km in 2018 to 1,524.2 billion tonne km in 2022, due a decline in coal shipments. The limited demand caused commodity prices to fall and affected the productivity of different industries, which impacted rail freight.
Increased fleet of bulk carriers to drive growth of the ocean fleet size
In China, the fleet size recorded a CAGR of 4.1%, from 3,512 vessels in 2012 to 4,287 in 2017 and is anticipated to post a CAGR of 3.8%, from 4,482 in 2018 to 5,208 in 2022. This is primarily due to a rise in the fleet size of bulk carriers, which accounted for 25.3% of the total ocean fleet size in 2017 and rose from 642 units in 2012 to 1,069 units in 2017.