China, India emerge as ‘powerhouses’

China’s emergence as an economic powerhouse and its subsequent influence on trade will be a dominant factor in the decade ahead, say industry pundits. This growing influence, says SDV South Africa regional managing director of logistics Philippe Deneve, will have a “major” impact on South Africa’s manufacturing growth, with high labour costs making it difficult for the country to compete. “As a result SA will export less and become less competitive compared to Asia.” Buffalo Freight Systems managing director Margrit Wolff agrees that one of the key issues to affect the industry in the decade ahead will be the decline of western economies and the growth of the Asian economies. The entry of China into the World Trade Organisation in December 2001, adds Kum Naicker, cargo manager Emirates SkyCargo, had an immediate impact on air cargo. “Coupled with China, the emergence of India as an economic powerhouse has also had a positive impact on the air freight industry. At Emirates, for instance, we have continued to sustain our commercial and freighter frequencies in both these markets. Emirates’ commitment to these markets has been rewarded with a significant increase in frequencies and multiple destinations.” The emergence of the BRIC (Brazil/ Russia/India/China) countries in the world economy will exert pressure on and challenge trade barriers and protectionist policies in the next decade, predicts Naicker. A developing Africa, he adds, will be a key target for these countries due to the continent’s rich mineral wealth. While Deneve however agrees that mining, oil and gas will continue to dominate in the continent for the next 10 years, he says diversification away from the mining sector will feature “strongly”. “Countries with open skies policies and airlines planning for this new shift in economic power will be the biggest beneficiaries of the trade boom,” concludes Naicker.