Maritime
China Exports To Face Tough 2014 as Yuan Climbs
BEIJING – China’s export growth was disappointing in the final month of 2013due to lackluster demand from developed markets, data released Friday showedBut there could be more problems in store for China’s exporters in 2014 as the yuan currency’s continued appreciation against the U.S. dollar makes the country’s goods more expensive in world markets.
China’s exporters have to contend with rising wages and other costs that have crept up in recent years. The appreciation of the yuan, or renminbi, is another headache, which makes China’s goods more expensive overseas and reduces profits in local-currency terms.
“Rising wages and the yuan are a tremendous problem for us,” said Uwe Hutzler, the general manager of a Chinese company that supplies leather to clothing manufacturers. “We have to pay our expenses and salaries in renminbi but our invoices are in dollars.”
China still remains an export powerhouse for manufacturing goods like electronics. The nation’s share of world trade remains above 10% despite cost pressures. Foreign companies say they need to invest in China because of its large scale of production and integrated supply networks.
Data released Friday showed China’s total trade exceeded $4 trillion in 2013, overtaking the U.S. as the world’s largest trading country.
But there are signs of potential problems ahead for the nation’s export sector. Weak demand from the U.S. and Europe is a concern.Exports in December grew 4.3% compared with a year earlier, the latest data showed, down from 12.7% year-over year growth in November. That is partly explained by distortions in the data, with an unusually strong month in December 2012 providing an unflattering comparison.
ANZ Bank pointed out export growth in 2013 as a whole was 7.6%, the second straight year exports have undershot an 8% target. The bank put this down to “diminishing trade competitiveness” as the yuan appreciates.
In real terms — taking account of inflation — the currency appreciated 18.5% against the dollar between June 2010 and November 2013, according to calculations by Karim Foda, a researcher at Brookings Institution. Against some Asian currencies — notably the Indonesian rupiah and the Indian rupee, which fell sharply last year — the declines have been even larger.
More than 500 Chinese companies surveyed by Global Sources, a China-based firm that runs an online marketplace for exporters, cited the strength of the yuan as the most pressing challenge of 2014. A year earlier the currency issue was only number four on the list, eclipsed by rising costs, price competition and slow orders from Europe and the U.S.To deal with rising costs, many manufacturers based in coastal southern China are moving production to cheaper inland facilities or to cheaper countries like Cambodia, Bangladesh and Vietnam. Since the beginning of the 2008 financial crisis, shoemakers in Guangdong region have moved about one third of their production to the interior of China and another third to Southeast Asia, said Li Peng, secretary general of Asian Footwear Industry Association.
“A lot of shoemakers near the coastal areas barely make any profits,” he said. “They are struggling to survive.”
Chetan Ahya, an economist with Morgan Stanley in Hong Kong, says it’s too early for manufacturers to have shifted orders from China based on currency movements, but this could become a bigger factor in 2014.
Chinese officials point out that a stronger yuan also means cheaper imports. China’s government is attempting to move the country away from reliance on state-led industry and exports toward larger domestic consumption. Cheaper imports of foreign goods will help achieve this goal.
“Yuan appreciation will surely lift exports prices and undermine our exports competitiveness,” said Zheng Yuesheng, a spokesman for the Customs Administration. “But… yuan appreciation also helps lower our imports costs.”Policy makers, though, are keen the shift away from exports and heavy industry doesn’t lead to economic dislocations and rising unemployment.
There already are worrying signs that China’s role as the world’s factory floor is being undercut. Foreign investment into Chinese manufacturing dropped 5.7% year-over-year in the first 11 months of 2013 to $64.7 billion, the most recent data available, after a 7.1% decline in 2012. In contrast, Vietnam’s FDI surged by more than 80% last year as manufacturers rushed to take advantage of lower costs.
The production of the low-end household goods that were long the mainstay of China’s economic growth has stagnated. In the first eleven months of 2013, China sent 15% fewer electronic calculators abroad than in the same period a year earlier, 12% fewer umbrellas, and 21% fewer cigarette lighters.
Mr. Zheng, the customs spokesman, acknowledged that the currency issue is a serious one for companies, citing a government survey which found that yuan appreciation significantly impacted costs for 60% of exporters.
“To deal with the issue, I can only recommend that exporters actively upgrade their products and produce more value-added exports,” he said.
– WALLSTREET JOURNAL
The management of the Nigerian Maritime Administration and Safety Agency (NIMASA) has advised International Oil Companies, terminal and jetty operators, and all other companies involved in stevedoring in the country to refrain from engaging unregistered dockworkers.
The information was contained in a statement made available to Biztellers by the Head, Public Relations, NIMASA, Osagie Edward.
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According to the statement, all stakeholders, including dock labour employers and stevedoring companies, are encouraged to apply for new operating licenses or renew expired ones within a 30-day moratorium period.
“This requirement,” it added, “is stipulated by the NIMASA Act of 2007 and outlined in the NIMASA Stevedoring Regulations of 2014, which mandates strict compliance from all maritime operators.”
Osagie cited the Director General, NIMASA, Dr. Dayo Mobereola as laying emphasis on the need for stakeholders to comply with extant laws and regulations.
Dr Mobereola said, “No terminal or company shall continue to engage the services of unregistered dockworkers for cargo handling at their work locations.
“This move is part of our broader effort to ensure safe and regulated operations within Nigeria’s maritime industry. Compliance with these regulations will enhance our ability to maintain an up-to-date database of dockworkers operating in the country. It also improves our planning processes, as we are committed to developing their capacity to meet globally accepted standards for dockworkers in Nigeria. We intend to enforce full compliance after the moratorium period.”
It was gathered that the NIMASA Act, 2007, Part IX, Section 27, addressed the registration of Dockworkers with focus on Maritime Labour.
“It ensures the Registration, Regulation, and control of Maritime Labour, including dockworkers. The Act assigns the Agency the responsibility of maintaining standards in accordance with international best practices,” Osagie added.
Nigeria has expressed a strong desire to seek election into Category “C” of the International Maritime Organization (IMO) Council.
The Honorable Minister of Marine and Blue Economy, Adegboyega Oyetola, made the disclosure at the 2024 World Maritime Day parallel event in Barcelona, Spain.
Oyetola noted that Nigeria has put in place the basic needs for the development of her maritime industry in line with recognized global best practices.
In his words, “our active participation in upholding key conventions, such as the Safety of Life at Sea (SOLAS) and the International Ship and Port Facility Security (ISPS) Code, reflects our dedication to ensuring the safety of international shipping.
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There have been no incidents of piracy in the last three years, as confirmed by the International Maritime Bureau (IMB). By deploying resources to provide maritime security assets, Nigeria has solidified its role as a key guardian of maritime security in the Gulf of Guinea.
Nigeria remains a valuable source of manpower for the industry. I therefore urge our partners to explore this potential and assist where possible in the best interest of all. Our Maritime Academy has adequate resources and facilities to support this development.
“I am pleased to announce Nigeria’s resolve to seek a Category “C” membership on the Council.
On his part, the Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dayo Mobereola, assured that no stone will be left unturned to ensure success in the quest for IMO Category C membership at the next elections.
According to him, “We at NIMASA have met with the IMO technical team and have commenced work on all identified grey areas so that Nigeria can address the gaps identified during the last audit by the IMO.
”We have also commenced the process of effective communication with other member states using the IMO GSIS platform, among others. While we at NIMASA focus on the technical aspects of the preparations, our supervising Ministry will provide the political will to guide Nigeria back to the Council at the IMO.”
Oyetola, who held engagement sessions with the IMO Secretary General Arsenio Dominguez and other diplomats, was accompanied on the working tour by the Ministry’s Permanent Secretary, Mr. Olufemi Oloruntola; the Director General of the NIMASA; the Managing Director of the Nigerian Ports Authority (NPA), Dr. Abubakar Dantsoho; the Managing Director of NIWA, Mr. Bola Oyebamiji; and the Director of Maritime Safety and Security Services, Mr. Babatunde Bombata.
This year’s parallel event with the theme: Navigating the Future: Safety First, brought together international maritime leaders and experts to discuss future challenges and opportunities, with the aim of ensuring that safety is prioritized in the day-to-day operations of the global maritime sector.
The adoption of the Public Private Partnership (PPP) model is essential for the infrastructural development of Nigeria’s maritime sector.
This is the view of the Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dayo Mobereola.
The DG, shared his views while hosting the Director General of the Infrastructure Concession Regulatory Commission (ICRC), Dr. Jobson Oseodion Ewalefoh.
He emphasized the importance of the Commission’s increased involvement in attracting private investors to develop infrastructural capacity in Nigeria’s maritime sector.
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Dr. Mobereola said, “We appreciate the Management of the ICRC for being responsive. However, you know that the maritime sector is capital intensive and government funds cannot solely put in place the required infrastructure. We need the ICRC to develop PPP based business models that will be attractive to the private sector both from within and outside the country.
“There is the need to streamline processes by the use of technology, as we will continue to count on the support of ICRC to help drive the Agency’s PPP projects for effective and efficient service delivery to our stakeholders”.
Lending support to Dr. Mobereola’s views, Dr. Ewalefoh, underscored the significance of the maritime sector to Nigeria’s economy.
He noted that the PPP model would facilitate increased funding and expertise from the private sector, thereby accelerating the growth and development of the Nigerian maritime sector. Additionally, he stated that the ICRC is prepared to engage with the Agency on its projects and ensure timely execution.
“There is no time to waste; our country needs lots of funding for infrastructure and we need to create an enabling environment for activities to thrive. First, is service delivery, not revenue generation, and people will be willing to pay if they get the right services”, the ICRC boss noted.
The PPP model has proven to be the most viable approach worldwide for driving government policies that promote development and economic growth.
Biztellers reports that as a regulatory agency and Nigeria’s Maritime Administrator, the NIMASA has consistently embraced collaboration and partnership through the PPP initiative to ensure the growth and development of the maritime sector.
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