Annual Report 2019

Chairman’s Statement 10 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED FUTURE PROSPECTS Looking into 2020, the global economy is expected to recover with moderate growth, yet the prospect remains subdued. Amid continuously sluggish manufacturing industry and heightening deflation threats, and affected by the global pandemic of novel coronavirus pneumonia epidemic in particular, the developed economies will continue to experience a slowdown of economic growth in general. The US economy faces clouded outlook, and could further weaken in the future. Affected by the Brexit and the emerging trade protectionism, the prospect of the European economies is far from optimistic, and its weak growth momentum will be difficult to see a fundamental turnaround. Emerging economies are expected to see a rebound in economic growth in 2020, yet facing the uncertainties arising from the novel coronavirus pneumonia epidemic. In particular, Southeast Asia will become one of the regions with more promising economic development thanks to the demographic dividend and consumption potentials. However, the South American countries will remain subdued affected by the economic and political crisis; while economies in the Middle East, driven by commodity prices, will experience instability. According to the forecast of IMF in January, the global economy will grow at 3.3% in 2020, representing a slight increase as compared to 2.9% in 2019, among which, the economic growth in developed economies is expected to slow down to 1.6% from 1.7% in 2019; emerging and developing economies will grow by 4.4%, up 0.7 percentage point as compared to that of 2019; and the total global trade volume (including goods and services) will grow by 2.9%, up 1.9 percentage points as compared to that of 2019. However, IMF expected to cut the above forecasts, considering the impact from the outbreak of the novel coronavirus pneumonia epidemic. China’s economy will face continued pressure amid the new normal and a certain short-term impact from the epidemic. Nonetheless, with the epedmic being effectively controlled and enterprises successively resuming production in an orderly manner, the impact will be limited on China’s economy in the mid-to- long term and China’s economy is projected to maintain a reasonable growth in 2020. China’s deepening connection with the rest of the world, such as globalisation of the financial market and the opening-up of the service sector, will bring opportunities to both China and the global economy. Meanwhile, the growth in China’s consumption will drive economic growth domestically. In 2020, trade disputes and geopolitical frictions will be likely to linger on, coupled with the spread of novel coronavirus pneumonia epidemic, which will become major factors affecting the global economy and market. The presidential election in the US will bring about uncertainties, which will further shake the market confidence in the US economy. The post-Brexit impact on the global economy and trade remains unknown. Uncertainties regarding the European and US economies and trade will also affect the Asian economy. The global trade structure will encounter an in-depth adjustment in the future. With trade disputes unresolved in the near future, small-scale and flexible exporters may benefit the most from trade diversion in the coming year. Facing the challenging macro environment, the Group will utilise the balanced port investment network in different regions in China and overseas and endeavour to maintain a steady development of port business in 2020.