IMIF Buffet Luncheon
Date: Wednesday June 20 2012
Venue: Moore Stephens LLP, 150 Aldersgate Street, London EC1A 4AB
Host: Richard Greiner, Partner, Shipping Industry Group, Moore Stephens LLP
Speaker: Shicheng Yang (Simon Young), Chief Executive, COSCO (UK) Ltd
Subject: Aspects of China Economy
“We are all talking about China,” said Jim Davis, opening the meeting, “and why not? They are having this amazing economic revolution.” With a population of 1.3bn-plus, China was of vital interest and it was fortunate that there were many forward looking people in the country.
Mr Young, who has been with COSCO for 25 years and since October 2009 has headed COSCO UK, offered some personal reflections and quoted trade and maritime statistics from various sources to the gathering. He made clear that he was speaking on a strictly private basis, which he thought would lead to a relaxed discussion, which it did.
Amid some wide-ranging and thoughtful contributions from the 50-strong audience on the role of China in the global economic and maritime spheres, Mr Davis said: “Over here [in the West] people are focused on short-term, quick results. The Chinese have said: we are building this long-term view of investment.” China was working on the basis of a longer-term insurance for the future – buying ore, but not just the commodity itself, they were securing producers of ore; and buying into mineral and energy projects in Australia, Africa, and Canada.
Shipbuilding is one of the industries that the government in Beijing is seeking to encourage, for its role in offering employment to the population, and current capacity in China is according to some estimates 16.5m dwt, a significant proportion of world capacity. Mr Davis observed that the industry at large was capable of building the equivalent of the whole world fleet every seven years, “in other words, it is hopelessly big.”
Marvelling at the pace of civil engineering in China, Mr Greiner quoted calculations that the nation was building the equivalent of a city for 20m people every year, thereby reinforcing demand for construction workers and products.
With all this in mind, delegates came away with the conclusion that they should be keeping an eye on the property market in China, alongside their monitoring of the shipping market. They perceived positives and negatives in the developing China situation, but many opined that the former outweighed the latter, the projected rate of growth in gross domestic product having been trimmed to “only” 7.5% in 2012.
Mr Davis led a vote of thanks to Mr Young for his command of the subject, and on behalf of those present expressed thanks for the continued support from Mr Greiner and his colleagues at Moore Stephens for IMIF.