China will contribute $40bn to set up a Silk Road infrastructure fund to boost connectivity across Asia, President Xi Jinping announced on Saturday, the latest Chinese project to spread the largesse of its own economic growth.
Analyst Insight: Both the public and private sectors in China are taking bold steps to respond to challenges of the new consumption-driven economy. Government measures, though stuck at a policy level in many cases, are addressing the right issues. At the same time, domestic companies are rising up to meet new demands. In 2014, China will see big changes in its core logistics and manufacturing industries. Some of the top areas seeing change include domestic transportation, distribution, import and export, as well as sourcing. - Jim Serstad, Managing Director Asia, Tompkins International
China Daily reports that the value of trade in China's goods in 2013 is set to exceed that of the U.S., making the world's second-largest economy the world's top trader for the first time in the modern era.
Cabotage regulations for cargo moving to and from Shanghai have been formally liberalised. Whilst this should be positive for the port's transhipment activity, the effect is likely to be limited.
It is not enough for global businesses to know that in coming years China's economy will move away from an over-reliance on investment and toward more consumption. They also must know that the potential costs and benefits of rebalancing the world's second-largest economy are high and will affect industries not only domestically but also around the world.