Annual Report 2019

Chairman’s Statement 8 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED REVIEW FOR THE YEAR In 2019, the global economy witnessed a steady yet sluggish growth under obvious downward pressure. The growth momentum of developed economies slowed down gradually, and the growth in some of the emerging markets and countries was below expectation. According to the “World Economic Outlook” update report published by the International Monetary Fund (“ IMF ”) in January 2020, the global economy was expected to grow by 2.9% in 2019, down 0.7 percentage point as compared to 3.6% in 2018, among which, developed economies grew by 1.7%, while emerging markets and developing economies grew by 3.7%, down by 0.5 percentage point and 0.8 percentage point, respectively, as compared to those of 2018. Total global trade volume (including goods and services) grew by 1.0%, representing a decrease of 2.7 percentage points as compared to that of 2018. The Chinese economy grew by 6.1% in 2019, representing a year-on-year decrease of 0.5 percentage point. In general, China continued to promote high-quality development and maintained a stable economic growth throughout the year with a promising prospect in the long run. Uncertainties surrounding the US-China trade frictions lingered despite its preliminary de-escalation. Facing the complex and turbulent external environment, China steadily developed its foreign trade while improving the quality with an optimised structure. According to the statistics published by the General Administration of Customs of China, China’s total foreign trade of import and export value amounted to US$4.58 trillion in 2019, representing a year-on-year decrease of 1.0%, among which the export value was US$2.50 trillion, representing an increase of 0.5% year-on-year; while the import value totalled US$2.08 trillion, representing a decrease of 2.8% year-on-year. Affected by the global economic and trading conditions, the global port operations generally experienced a slowdown of growth in 2019. The Group’s ports operation recorded a total container throughput of 111.72 million TEUs, representing a 2.4% year-on-year growth, and bulk cargo volume of 449 million tonnes, representing a decrease of 10.5% year- on-year. Looking into the regional performance, container throughput handled by the Group’s ports in Mainland China totalled 83.67 million TEUs, up 3.6% year-on-year; ports in Hong Kong and Taiwan handled a combined container throughput of 7.21 million TEUs, down 6.1% year-on-year; overseas operations delivered a container throughput of 20.84 million TEUs, up 0.9% year-on-year. Among the major ports in the Group’s portfolio, Shanghai International Port (Group) Co., Ltd. handled a container throughput of 43.30 million TEUs, representing a year-on-year increase of 3.1%, being the world’s largest for the tenth consecutive year. As a result of the disposal of the entire equity interest held in Shenzhen Chiwan in June 2018, container throughput handled by the Group’s terminals in the West Shenzhen Port Zone was 10.21 million TEUs, down by 4.4% year-on- year. Colombo International Container Terminals Limited (“ CICT ”) in Sri Lanka delivered year-on-year growth of 7.4% by handling a container throughput of 2.88 million TEUs. The wheeled and bulk cargo business in Hambantota International Port Group (Private) Limited (“ Hambantota Port ”) progressed well with a RORO volume of 0.41 million vehicles, grew by 75.6% year-on-year, and a bulk cargo volume of 0.50 million tonnes, indicating a significant increase as compared to the 0.18 million tonnes in 2018. Lomé Container Terminal S.A. in Togo handled a container throughput of 1.13 million TEUs, representing a growth of 7.7% year-on-year. Thanks to the active exploration of cargo in its hinterland after the acquisition was completed in February 2018, TCP Participações S.A. in Brazil handled a container throughput of 0.92 million TEUs during the year, up by 32.0% year-on- year. Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim Ş irketi in Turkey handled a container throughput of 1.28 million TEUs, representing a growth of 1.9% year-on- year. Terminal Link SAS delivered a container throughput of 13.25 million TEUs, down 2.8% year-on-year.