Thursday 24th Aug 2017 - Logistics & Supply Chain

What’s wrong with ten per cent growth?

Most businesses would be thrilled to report a growth rate of ten per cent – particularly in the current economic environment.

But there is one place where such growth rates are not only not considered good, but downright disappointing: China, of course.

China Daily has just reported that the total value of the logistics sector for the first half of 2012 grew by ten per cent to 83.6 trillion yuan (12.9 trillion euros).

The figures produced by the China Federation of Logistics & Purchasing show that the growth rate was down 3.7 percentage points on 2011.

The federation believes the sector’s value will grow by 11 per cent for the whole year, as the number of favourable factors is expected to increase in the second half.

The CFLP figures also show that total expenses rose 11.9 per cent year on year to 4.1 trillion yuan, down 6.4 percentage points from a year earlier, the CFLP said. The expenses represented 18 per cent of China’s GDP – higher than the ratio in most developed economies.

These are the lowest growth figures since 2009 and China is increasingly looking to domestic consumption to drive growth.

It doesn’t seem to have deterred DHL which has just announced some huge investments in the region – a 144m euro express hub at Shanghai plus109m euros worth of dedicated aircraft, and a 63m euro mega-hub in Hong Kong.

The reality is that few countries are going to grow as fast as China over the next few years. But that growth will also bring change with more emphasis on domestic markets which will have an impact on how it is seen in a global supply chain context.

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