Maersk Considers Business Split – Is China’s Slow Growth Still Enough?
In Q1 2016, China recorded its slowest economic growth since the global financial crisis of 2009. While this is considered low by Chinese standards, the government claims it is still on track to meet the targets set in the 12th (until 2015) and 13th Five-Year Plans (until 2020).
China's Path to Wealth
What many overlook is that China was one of the world’s wealthiest nations centuries ago. However, a combination of rapid population growth and isolationist policies led to growing economic stagnation. Since the 1980s, however, China has undergone a rapid transformation, with GDP quadrupling thanks to 10% annual growth. Still, it remained a relatively minor global player until joining the World Trade Organization (WTO) in 2001, which triggered an export boom of unprecedented scale.
Sino-Dutch Trade Relations
The long-standing trade ties between China and the Netherlands have been characterized by stability, legal frameworks, and mutual cultural respect. China also tapped into Dutch expertise and technologies, leading to favorable trade agreements with low import duties.
Dutch imports from China include clothing, computers, printers, and telecommunications equipment.
Dutch exports to China consist largely of raw materials such as paper dust, scrap metal, chemical products, and plastics.
Domestic Consumption Shift
China's initial rapid development focused heavily on export-oriented industries, resulting in underdeveloped domestic consumption. To address this imbalance, the 12th Five-Year Plan (2011–2015) prioritized consumer spending, introducing pensions and expanding access to healthcare. Now, as urban growth on the eastern coast stabilizes, economic development is shifting westward.
Realistic Targets in the 13th Five-Year Plan
In Q2 2016, China passed its 13th Five-Year Plan, setting more realistic goals. By 2020, when the Communist Party celebrates its 100th anniversary, the country aims to be moderately prosperous, with no extreme poverty remaining.
Soaring National Debt
The critical question remains: Can China keep its promises? Through massive stimulus programs, China's national debt has reached 240% of GDP, placing it among the most indebted nations globally. Furthermore, due to non-transparent reporting, many economists estimate actual growth to be around 4%—a figure that would still be enviable in many (Southern) European countries.