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Rough seas for shippers expected to last for years

(China Daily)

10:08, November 04, 2011

BO'AO, Hainan - A lack of political consensus to achieve balanced global economic growth is making 2011 "the most painful" year for the already troubled shipping industry, said Wei Jiafu, chairman of China Ocean Shipping (Group) Co, China's largest State-owned shipping conglomerate.

This year has brought gloomy prospects for world economic recovery, as developed economies struggle with debt woes and high unemployment, while emerging markets are battling high inflation.

The global trade volume is still growing. But demand in the United States and Europe is expected to be low, which is likely to bring down the growth rate in the market.

The Baltic Dry Index, a benchmark for commodity shipping costs, has registered a 27 percent decline in the past year.

"There is still no political willingness to be seen (among world leaders) in addressing these problems," Wei said.

"This is making the year even more difficult (for the shipping industry) than during the global financial recession.

"Governments around the world responded immediately to save the markets during the crisis, but now they are making different policies serving their own interests," he added.

Wei was speaking at the World Shipping (China) Summit in Bo'ao, in South China's Hainan province, on Thursday. His comments came just days after Greece announced it would hold a referendum on whether to accept a bailout plan put forth by European leaders.

Dong Tao, managing director and chief regional economist for Asia excluding Japan at Credit Suisse SA, said the debt crisis in Europe is likely to worsen, affecting the banking system in Europe.

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