Freight Markets Between China and Africa Booming to Record Levels in the Trillions of Dollars

China Leaders Forum 2011, How American Companies can Plug Into The Chinese Rocket-Propelled Economy

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As reported by Bloomberg’s Sunil Jagtiani and Unni Krishnan, a record surge in trade between Asia and Africa to as much as $1.5 trillion by 2020 is prompting companies including AP Moeller-Maersk A/S and Deutsche Post AG (DPW) to expand shipping links between the continents. How China is expanding its reach to Freight Markets will be discussed at Golden Networking‘s China Leaders Forum 2011, October  7.

Chinese and Indian demand for commodities from coal to copper and African purchases of such items as automobiles and rice are set to fuel the fivefold rise in trade from $304 billion in 2010, said Anil K. Gupta, who holds the Michael Dingman Chair in Global Strategy & Entrepreneurship at the University of Maryland in College Park.

“Africa has the resources that Asia needs,” said Gupta, who is a visiting professor for the Fontainebleau, France-based business school INSEAD, co-wrote the book “Getting China and India Right” and studied in India. “Africa now has an historic opportunity to transform its development, and Asia has begun to look at Africa as a market of high growth potential.”

The strengthening ties are part of what HSBC Holdings Plc calls the new “Silk Road” connecting emerging markets and supporting global growth as U.S. and European expansions falter. Shares in Grindrod Plc, Africa’s biggest shipping company, and Kumba Iron Ore Ltd. (KIO) stand to benefit from the trade links to Asia, says private bank and asset manager Investec Plc.

The prospective growth in imports and exports must overcome a legacy of political instability in Africa that has constrained expansion. Most nations in sub-Saharan Africa had a gross domestic product per head of less than $1,000 in 2009, according to the 2011 Africa Progress Report, produced by a group chaired by former United Nations Secretary-General Kofi Annan.

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