Mainland slows rate of infrastructure spending
Toh Han Shih
The mainland expects to continue increasing spending on transport and infrastructure this year but at a more cautious pace, according to the Ministry of Transport. For its two largest ports, that means Shanghai plans moderate growth, while Shenzhen is reviewing its expansion on fears of slowing global trade.
The central government plans to increase its spending on transport, excluding railways, by 10.3 per cent to 286.7 billion yuan (HK$340.5 billion) this year, a slower increase than last year's growth of 19.3 per cent, according to the ministry's website.
As for fixed-asset investment, the central government planned to reduce this by 10 billion yuan to 382.6 billion yuan, said the ministry. Total fixed-asset investment - which included roads, ports, airports and railways - was expected to grow 18 per cent this year, slower than last year's 23.8 per cent. The nation's total fixed-asset investment reached 27.8 trillion yuan last year, according to the National Bureau of Statistics.
Shanghai, which overtook Singapore as the world's busiest container port last year, would increase its container throughput to roughly 37 million 20-foot equivalent units (TEUs) in 2015 from 29.1 million TEUs in 2010, Chen Xuyuan, the chairman of Shanghai International Port Group, Shanghai's port operator, said. Shanghai port had shifted from capacity shortage to excess capacity.
Nomura analyst Jim Wong said the expected container throughput growth of 20 per cent over five years, or roughly 4 per cent a year, was cautious, given that Shanghai's container throughput grew in the low teens in the first two months of this year.
'Chinese ports haven't been expanding that much, as they worry about US demand,' he said. 'It will be harder for Shanghai to grow by double digits as it is already No 1. The port's cautious expansion is probably in line with what they expect global trade growth will be.'
'For ports in the Pearl River Delta, they are planning to add capacity, but you won't see a dramatic increase,' said Willy Lin Sun-mo, chairman of the Hong Kong Shippers' Council.
As China shifted towards higher-cost manufacturing, the major growth area of the nation's exports would be qualitative value instead of quantity, said Lin.
A Hong Kong shipping executive said Shenzhen port officials were reviewing expansion plans for Shenzhen, the world's fourth-busiest container port behind Hong Kong.
'Shenzhen port officials are concerned about excess capacity. The growth has not been so strong in the past two years,' said the executive.
This year China's total road length would grow 3 per cent to 4.1 million kilometres, said the Ministry of Transport.
The number of airports in the mainland would increase by six to 181, while the length of internal waterways would grow 4 per cent to 1.04 million kilometres.
Taking it carefully
Transport spending will rise 10.3 per cent to reach 286.7 billion yuan
Total fixed-asset investment is expected to grow by this much: 18%