• Skip to main content
  • Skip to primary sidebar

Ad – Bottom Content

Payload Asia

Logistics execs fear "economic shock" from China contagion

Payload Asia

Leaderboard

  • Home
  • Latest News
  • Channels 
    • Carriers
    • Aircraft Manufacturers
    • Airports
    • Courier & Mail
    • Freight Forwarders
    • Express
    • Ground Handling & Cargo Terminals
    • Logistics
  • 12th Payload Asia Awards
    • About
    • Categories
    • 11th Payload Asia Awards
    • 10th Payload Asia Awards
    • 9th Payload Asia Awards
    • Awards Gallery
  • Subscribe
  • Advertise
  • More 
    • Event Calendar
    • Directory
    • Contact Us
Share

Logistics execs fear "economic shock" from China contagion

January 19, 2016 by PLA Editor

Supply chain industry executives see a slowing China and fluctuating oil prices as the top threats to emerging markets growth in 2016 and are bracing for more volatility in the global economy. In a new survey of more than 1,100 global logistics and supply chain executives, respondents identified the possibility of an “economic shock” as the leading risk for the Asia-Pacific region, reflecting concern that a slowing China could have a ripple effect on the region.
Seven of the 11 Asia-Pacific countries in the Index rank among the top 20 emerging markets. Only Indonesia, which dropped three spots to No. 7, fell in the rankings.
“It was a volatile year for emerging markets, and you see that in the Index. Eight of the top 10 emerging markets shifted places,” said Essa Al-Saleh, president and CEO of Agility Global Integrated Logistics. “Despite the turbulence, the fundamentals driving growth remain consistent – a rising middle class with spending power, progress in poverty reduction, growing populations. That’s why we are still positive on the outlook for emerging markets and see them driving global growth.”
The survey is part of the 2016 Agility Emerging Markets Logistics Index. The Index, now in its 7th year, provides a snapshot of logistics industry sentiment and ranks the world’s 45 leading emerging markets based on their size, business conditions, infrastructure and other factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors.
“The region’s worries about China are understandable. Other countries fear a slowing China means a weaker currency that will hurt their competitiveness. At the same time, China’s suppliers – from mines in Africa to component makers in Asia – are concerned that demand for their products could fall significantly,” said Chris Price, CEO of Asia-Pacific for Agility Global Integrated Logistics.
In past Index surveys, logistics professionals identified natural disasters and corruption as the top threats in Asia. This time, 54.8 per cent of executives say China’s economy faces major hurdles over the next two or three years and 38 per cent say they are reassessing their China strategy as a result. Sluggishness in the Chinese economy has prompted 22 per cent to re-examine their overall emerging markets strategy.
India surpasses China
For the first time, supply chain professionals surveyed see India – rather than China – as the emerging market with the most growth potential. And in the overall Index rankings, which are based on economic and social data, India climbed two spots to No. 3, behind only China and United Arab Emirates (UAE), amid strong economic performance and an initial round of reforms launched by the government of Prime Minister Narendra Modi.
China, the world’s second-largest economy, remains the leading emerging market by a large margin. Among the countries at the top of the Index rankings, UAE (No. 2), India (3) and Malaysia (4) leaped over the commodity-dependent economies of Saudi Arabia (5), Brazil (6) and Indonesia (7). Rounding out the top 10 were Mexico (8), Russia (9) and Turkey (10).
Meanwhile, in other findings, Malaysia jumped four spots to No. 4 in the overall Index, ranking it ahead of Saudi Arabia, Brazil, Indonesia, Mexico, Russia and Turkey, all of which have larger economies. Malaysia’s economic diversification efforts are paying off, the report said, with Malaysia ranking behind only UAE in “connectivity,” a measure of infrastructure, transport links and customs/border efficiency.
UAE, home to the powerhouse economies of Dubai and Abu Dhabi, has the best business climate and the best “connectedness,” a measure of infrastructure and transport connections, of any emerging market. As a result, UAE ranks as the world’s No. 2 emerging market after China, even though China’s economy is 25 times larger; India’s is five times larger; and Brazil’s is six times larger.
The most business friendly conditions are found in Gulf states. UAE, Qatar and Oman have the best business climates – a combination of market access and risk, regulation, foreign investment, urbanisation and wealth distribution. Other Gulf states also rank near the top in business conditions: Saudi Arabia (No. 5), Kuwait (9) and Bahrain (11).
Countries in Latin America are losing ground to other emerging markets as a result of recession and political turmoil in Brazil, the region’s biggest economy, and depressed prices for commodity exports. Of the 10 countries that slipped furthest in the Index, six are in Latin America: Peru, Argentina, Uruguay, Brazil, Colombia and Venezuela. Even so, Chile continues to be the top-ranked emerging market with GDP under US$300 million.
Russia, hurt by Western sanctions and isolated economically since it began backing rebels in Ukraine and intervened militarily in Syria, fell from No. 7 to No. 9 in the Index. Tension with Russia and the loss of economic output in the breakaway Crimea region have hurt Ukraine, as well. Ukraine fell four spots to No. 34.
John Manners-Bell, chief executive of Transport Intelligence (Ti) which compiled the index, said: “The world’s economy is still riven by instability, and emerging markets such as China and Brazil have not been immune. However others, such as Mexico, are in a far stronger position and will benefit from the economic growth experienced in the US and Europe. More than ever, investors in emerging markets need to be discerning and the results of our Index are critical to providing clarity in a confusing and complex world.
Uncertainty going forward
After a year of turbulence, 61 per cent of logistics industry executives surveyed say they are unclear on the direction of the global economy or expect more volatility in 2016. In spite of their wariness, roughly the same proportion (59.4 per cent) say the International Monetary Fund forecast of 4.7 per cent growth in emerging markets is “about right.” Emerging markets grew an estimated 3.6 to 4.2 per cent in 2015, down from 4.5 per cent in 2014.
Industry executives continue to see trade routes originating in Asia as, by far, the most promising. Their top six picks for trade lanes all have Asian origins, and Intra-Asian trade lanes are the ones they view as best for 2016.
For the first time, logistics professionals see consumer spending in Africa as a more important driver of growth than energy and minerals. They identified Nigeria, South Africa, Ghana and Kenya as Africa’s most promising markets. In spite of recent growth and investment, Sub-Saharan Africa remains a frontier market for most supply chain executives: only 21.2 per cent said they have operations there.
The logistics industry is intrigued by the possibility that Iran will emerge from its long economic isolation as the result of an agreement to curtail its nuclear program. In the survey, Iran moved up 12 spots – from No. 27 to No. 15 – among countries with potential as major logistics markets.

Other Topics: Agility, Agility Emerging Markets Logistics Index, Air & Cargo Services, air cargo, Air Cargo Asia, air cargo freight, Air Forwarding, air freight, Air Freight Asia, Air Freight Logistics, air freighter, air freighting, Air Logistics Asia, Air Shipping Asia, airlines cargo, airways cargo, asia cargo news, cargo aviation, emerging markets, Essa Al Saleh

Related Articles

  • Xeneta reports resilient air cargo market despite July IT outage
  • Lufthansa Cargo presents commitment to transforming the aviation industryLufthansa Cargo presents commitment to transforming the aviation industry
  • cargo handling services of Vienna AirportLufthansa Cargo continues to rely on the cargo handling services of Vienna Airport
  • exclusive commercial rights on first key laneVietjet Air Cargo, Teleport deepen partnership with exclusive commercial rights on first key lane
  • Budapest Airport Revolutionises Cargo Operations With Kale Info Solutions’ Airport Cargo Community System
  • RTX Pratt And Whitney's West Palm BeachRTX’s Pratt & Whitney announces GTF MRO capacity expansion at West Palm Beach facility

Ad – After Content

Primary Sidebar

Trending News

  • CargoAi Unveils CargoMART Interline, revolutionising interline connectivity for airlines 10.3k views

  • FedEx empowers APAC businesses to navigate global trade shifts with confidence 148 views

  • From Hong Kong to Miami: Chapman Freeborn delivers key equipment to meet AOG demand 134 views

  • Magma Aviation joins industry leaders at Air Cargo Europe 2025, showcasing strategic vision and collaboration 123 views

Payload Asia Awards

Subscribe To
Our Newsletter



Payload Asia continues to be the authoritative source for informative, accurate and up-to-date news and information on the air cargo industry and related sectors.

With its updated and refreshed look the online edition continues to provide high quality coverage on the Asia-Pacific, India-Middle East, Europe-CIS, North & South America and Africa air cargo markets.

© 2024 Harvest Information. All rights reserved. Privacy Policy

Partner Sites : Asia Food Journal and Television Asia Plus .

We use cookies and similar technologies to improve your browsing experience.
Continuing to use this site means you agree to our use of cookies. I agreeRead More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non Necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

Analytics

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.

Performance

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

Advertisement

Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.

Save & Accept

Stay Updated!

Subscribe now to receive the latest news, updates, and exclusive insights. Don’t miss out!

 

By submitting this form, you consent to receive marketing emails from Payload Asia. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

Disclaimer: Translations on this website are automated using Google Translate. While we strive for accuracy, please be cautious, as machine translations may contain errors. For critical or sensitive content, consider seeking professional human translation. We are not liable for any reliance on the translated content.

1