China’s New Silk Road: The European perspective

Thomas Puls

4th June 2015, Brussels

The focal point of global economy shifts 1991 – 2014

0

5

10

15

20

25

30

35

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

USA

China

Japan

Germany

EU 15 without Germany

0

10

20

30

40

50

60

70

80

90

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

OECD-Countries

Emerging and Developing Countries

!  Asia is on the rise. The focal point of the global market turns east. ! China acts as the Asian growth engine. !  Trade with Asia is crucial for the economic development in Europe.

+

Source: International Monetary Fund, World Economic Outlook 95

Share of World-GDP current prices, percentage

Share of World-GDP current prices, percentage

Thomas Puls, China’s New Silk Road: The European perspective , Brussels, June 4th 2015

Increasing trade volumes cause significant transport requests – in both directions

!  In only ten years the Sino-European trade volumes rose by 168 percent !  In 2014 up to 100 Million tons of freight were moved between the EU 28 and China. !  The average value per ton rose by more than 50 percent.

+

Source: Eurostat

European trade with China – value in bn. Euros European trade with China – in Million tons

129.2 215.3

302.4 48.4

82.4

164.7

0 50

100 150 200 250 300 350 400 450 500

2004 2009 2014

40.2 45.4 56.6

18.3 33.4

43.3

0

20

40

60

80

100

120

2004 2009 2014

Export

Import

Thomas Puls, China’s New Silk Road: The European perspective , Brussels, June 4th 2015

Increasing cross-border investments Foreign Direct Investments (FDI) in Million Euros

!  For many years FDI developed in only one direction. Now this has changed. !  The outcome of this is an increasing need for transportation in both directions. !  The ship will stay the main freight carrier, but there is a need for additional

transport offers matched to changing needs in logistics.

+

Source: Eurostat

German assets in China Chinese assets in Germany

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2008 2011 2014

90,8%

-37%

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2011 2014

90,6%

33,2% 152,7%

Thomas Puls, China’s New Silk Road: The European perspective , Brussels, June 4th 2015

Freight carriers: The faster the more pricey

!  Land-based transport by rail closes a ability gap between sea and air freight. ! Due to its specifications rail freight is often used to transport more high-grade goods

than sea freight but less high-grade than air freight.

+

Source: Bosch, Odyssee Database 2014

30 - 36

Distance covered Route: Hamburg - Chonquing in 1.000 km

22

11

7.82

0 5 10 15 20 25

Sea freight

Rail freight

Air freight

Delivery period Europe - China in days

19 - 23

1 - 3

Carrier Price Index Europe - China Sea freight equal to one

1

5

11

0 2 4 6 8 10 12

Sea freight

Rail freight

Air freight

Thomas Puls, China’s New Silk Road: The European perspective , Brussels, June 4th 2015

There is a need for improvement on the route

Source: Trans Eurasia Logistics; World Bank Logistic Performance Index 2014

Poland Belarus Russia Kazakhstan Mongolia China

Thomas Puls, China’s New Silk Road: The European perspective , Brussels, June 4th 2015

32

32

87 133 132 38

121

Efficiency of the clearance process by border control agencies, including customs

Standing among 160 countries according to the World Bank

40 86 77 106 120

23

Quality of trade and transport related infrastructure 23

Essential to the „Go-West Strategy“

Source: Financial Times, CEIC, IMF

Thomas Puls, China’s New Silk Road: The European perspective , Brussels, June 4th 2015

+!  The Go-West Strategy

is a silver bullet to ensure long term growth in China.

!  Better access to the remote areas in western China provides new chances for the European industry.

!  Land-based transport allows access by avoiding transport bottlenecks in coastal areas.

Contact

Dipl.-Volksw. Thomas Puls Environment, Energy, Infrastructure !  +49 (0) 221 4981-766 " puls@iwkoeln.de