Container Investment Needed to Meet China’s Project Demands

China’s remarkable journey from a nation that was entirely dependent upon international trade to a domestic-based economy continues to inspire infrastructure projects in the country, with many more endeavors lined up in the coming years. The National Development and Reform Commission (NDRC), the top most planning unit in China, announced that the country needs more subways, highways, and sewage plants. It is believed that the undertaking of various infrastructure construction projects, and by increasing investment in certain segments of the economy, it will help to off-set the slowdown in the manufacturing and trade sector.

During the country’s recent economic slowdown, the Chinese government has taken a pro-active approach and taken some counter-cyclical measures to address domestic needs. This has been successful through the implementation of a meaningful fiscal stimulus plan rather than a monetary policy option taken by the likes of the United States and countries in the Euro Zone. As China is in the midst of a power change in November of 2012, all of these large capital-intensive infrastructure projects are viewed by officials in Beijing as an opportunity to stimulate the economy and reinvigorate its population. In fact, economist estimated that the total value of infrastructure projects approved by Chinese officials have reached approximately 1 trillion yuan (US $158 billion).

These ongoing infrastructure improvements to ports, railways, roads, warehouses, etc., will encourage shipping and logistics companies to become key contributors to the development of domestic trade. Furthermore, the growth of containerized cargo traffic is expected to grow exponentially when the development of these infrastructure projects begin. As well, analysts expect that it will also create a rising need for container lines and the investment community to invest in shipping containers, to meet the demand for the continuous transport of raw materials and workers to different construction sites and infrastructure projects throughout China.

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