Chinese port eyes container business pivoting to Southeast Asia as bilateral trade maintains steady growth after RCEP takes effect

Trade connectivity between China and Southeast Asian economies has been maintaining steady growth momentum in 2023, about a year after the implementation of the Regional Comprehensive Economic Partnership (RCEP) trade agreement. Southeast Asia is now China’s biggest trading partner, with 15% of the market share, as port data mirrors a deeply integrated industrial chain among Asian countries and an increasing pivotal role China plays in facilitating an orderly global supply chain. The robust economic cooperation among Asian economies would inject a much-needed boost to a world economy that has been staggering under multiple pressures, ranging from waning global demand and rising geopolitical tensions to US-led protectionism.

Shipping and port companies have been mulling over plans to open more customized sea freight routes, and Southeast Asia conspicuously is a focus this year. Qingdao port in East China’s Shandong Province has opened more than 80 shipping routes with Southeast Asia to date out of the total 220 routes. The port’s trade with Southeast Asia jumped 4% year-on-year last year, dethroning the US to become the largest trading partner. The implementation of the RCEP has fostered faster and more economically competitive trade and economic cooperation channels among China, ASEAN, Japan, and South Korea as well as other Asian economies.

There’s been a spike in sea transit business in the Qingdao port amid the RCEP’s implementation, which now represents 20% of its revenue, port officials said, a vivid display of the irreplaceable position China plays in global supply chains. Several years ago, the share of transit business in the Qingdao port was only 7%. Another hot transit route involves sea-railway combined transportation, which has been gaining steam in recent years as the Asian industrial chain becomes further intertwined.

The fruitful result of the RCEP has prompted port authorities to further consider potential business opportunities involving ASEAN routes. In January, the cargo throughput in Shandong port soared 5.3% year-on-year to 143 million tons, defying global headwinds. Industry observers said that the ramifications of the RCEP carry more weight in the midst of a possible global economic recession this year, providing a new impetus driving the global economic recovery post-virus while diluting the fallout of rising protectionism.