MNI China Press Digest Oct 20: Shipping, Dollar, Economy

Highlights from Chinese press reports on Monday:

• Freight rates from Shanghai Port to major U.S. destinations surged, with rates to the West Coast rising 31.9% to USD1,936 per 40-foot container (FEU) and to the East Coast up 16.4% to USD2,853, following U.S. President Donald Trump’s threat to impose additional tariffs from Nov 1, Yicai reported. Although Trump later softened his stance, some exporters accelerated shipments to avoid potential transport delays, while others became more cautious with new orders. Wang Sijie, vice president of Wanb Express Group, said exports to Europe and the U.S. have diverged sharply, with September shipments to the U.S. down 27%, marking the sixth straight month of contraction since April, while exports to Europe have emerged as the main driver of overall growth.
• Despite global frustration with U.S. dollar dominance, the greenback’s position remains entrenched, according to Guan Tao, a former senior official at China’s State Administration of Foreign Exchange (SAFE). Guan said de-dollarization marked by sustained capital outflows was highly unlikely given the U.S. balance of payments was characterised by persistent trade deficits financed through capital inflows. “The world is still far from escaping the dollar trap, and discussions of de-dollarization should not be overstated,” Guan said.
• China must maintain a medium-high growth rate of around 5% to reach the per capita GDP level of moderately developed countries, according to Huang Qunhui, member of the 14th National Committee of the Chinese People’s Political Consultative Conference, and researcher at the Chinese Academy of Social Sciences. Huang explained that a country’s potential growth rate naturally declines as it approaches full modernisation. Authorities must focus on promoting the advanced upgrading of industrial foundations and deepen the integration of technological and industrial innovation. To accelerate the deep transformation of traditional industries, Huang emphasised the importance of empowering key sectors with artificial intelligence.