TRAVEL HACK’S WORLD MARTIN FERGUSON
China’s stuttering economy could have big implications for travel
MONKEY BUSINESS I
t’s the greatest mass movement of human beings on earth: more than 700 million people cram into planes, trains and automobiles to return home for Chinese New Year. In February, which heralded the start of the Year of the Monkey, an average of 74 million trips were made on each of the ten days prior to the holiday. As more employment- seeking country folk flock to flourishing cities, those numbers will
burgeon. In addition to eight mega-cities with more than 10 million inhabitants, there are now already 102 Chinese conurbations with populations of more than one million. In comparison, there are 35 in Europe and only nine in the US. Fortunately for the Chinese population, investment in transport infrastructure has been high on the government agenda for some time. More than 50 civil airports have been constructed since 2006, which brought the total number to 200 last year. Another 30 are under construction, with 60 more being expanded. According to the country’s civil aviation administration, some £57 billion will be spent this year alone on aviation projects. The aviation sector in China
has grown by an average 15 per cent per year for the last three decades. That trajectory has lowered slightly of late, though analysts still predict double-digit growth for at least the next ten years.
42 BBT MARCH/APRIL 2016
Those following China’s recent travails could be forgiven for feeling a bit confused – good news and bad news come in waves
Millions have also been
poured into the development of high-speed rail across the country. At present, China operates more miles of rail track than the rest of the world combined. The network is also seen as more sustainable than air travel. Most of China’s new airports are underused.
An official last year admitted that at least 150 airports could not break even. More than half of the country’s air travel is
concentrated at only ten gateways. However, demand should align with supply over the coming years as the affluent urban middle class fuels growth in business travel and outbound tourism. In short, China has a travel infrastructure that is the envy of the West.
THE IMF EXPECTS... But those following China’s recent travails could be forgiven for feeling a bit confused. Good news and bad news come in waves. On one hand, the IMF expects China to account for nearly one fifth of the world’s economic activity in 2016. On the other, GDP is expected to fall to 6.3 per cent (down from 10 per cent in 2010). In October last year,
China’s president Xi Jinping enjoyed an extended stay in the UK. David Cameron claimed the visit generated around £30 billion in deals and investments. Trade relations were supposedly buoyant. Yet bookings made by business travellers via American Express Global Business Travel for flights to China fell 17 per cent year-on-year in 2015. Other global travel management companies have recorded similar figures. The business and finance sections in British broadsheets paint a pretty gloomy picture. China’s burgeoning debt and over- exposed financial institutions are cause for concern. The economic slowdown has already sounded alarm bells
in global markets. If the decline persists, the ripple effect could be felt around the world. But should business leaders really be worried? China expert Gordon Orr, a senior analyst with McKinsey, remains confident about the future. He recently stated: “In debates about whether growth is a percentage point up or down, we too often lose sight of the absolute scale of China’s economy.
“No matter what rate the country grows at in 2016, its share of the global economy, and of many specific sectors, will be larger than ever. [China] is an increasingly diverse, volatile, US$11 trillion economy whose performance is becoming more and more difficult to describe as one-dimensional.” Some sectors are booming, while others are no longer fit for purpose – a consistent trend in any large economy. It’s naive to think China is the source of the world’s economic ills. There are huge opportunities for British business, as long as they operate in the right sector. Recent regulatory changes mean foreign fund managers and brokers now have approval to open 100 per cent-owned investment operations, while demand for British talent has never been in higher demand. Last year’s softening of business travel volumes may only be a blip. Progressive travel departments would be well advised to keep up with developments.
Martin Ferguson is a freelance journalist, communications consultant and event moderator.
BUYINGBUSINESSTRAVEL.COM
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124