Annual Report 2021

15 ANNUAL REPORT 2021 Management Discussion and Analysis GENERAL OVERVIEW In 2021, the global pandemic situation of the COVID-19 was complex and challenging, with the resurgence of the pandemic and the different national policy options led to a divergence in the economic recovery of different countries. Although the global economy, especially the major economies, showed a recovery in general, uncertainties regarding to the economic recovery increased. According to the “World Economic Outlook” report published by the International Monetary Fund (“ IMF ”) in January 2022, the global economy was expected to grow by 5.9% year-on-year in 2021. Developed economies and emerging and developing economies will grow by 5.0% and 6.5% respectively. In the first half of 2021, benefited from vaccination acceleration, the recovery in the consumption side of global trade was boosted by the easing situation of the outbreak in Europe and the US. In the second half of 2021, however, the pandemic recurred. In addition to the global rebound of the Delta variant of COVID-19, which spread to many countries around the world, a new outbreak of Omicron variant of COVID-19 also occurred in major regions of the world at the end of 2021, posing a serious challenge to the global economic recovery. Amid the complex external environment, China conducted unified planning of pandemic prevention and control along with economic and social development. Its efforts effectively facilitated the restoration of normal production and everyday life. According to the National Bureau of Statistics of China, China recorded year-on-year GDP growth of 8.1% in 2021 and the growth rate was at the top position among the world’s major economies. In the second half of 2021, the foreign trade recorded better-than-expected growth driven by regional cooperation in trade, and the consumption demand gradually picked up and the economy showed positive signs of recovery. Overall, the outlook on China’s economy of the upward trend in the long-run hasn’t changed. To achieve high-quality economic growth, China will continue to deepen the supply-side structural reform and focus on the management on the demand side. According to the statistics published by the General Administration of Customs, China’s total foreign trade of import and export value amounted to RMB39.1 trillion in 2021, representing a year-on-year increase of 21.4%, among which the total export value was RMB21.73 trillion, up by 21.2% year-on-year, while the total import value was RMB17.37 trillion, up by 21.5% year-on- year. The trade surplus was RMB4.37 trillion, up by 20.2%. Since the beginning of 2021, the demand for global trade in goods has rebounded continuously, driving the demand in the maritime market. However, while export demand continued to increase, the backflow of empty containers boxes from European and American ports was slow due to the impact of the pandemic and labour shortage, coupled with the effect of multiple “black swan events” such as the Suez Canal blockage and coronavirus outbreak at Yantian Port, resulting in ship delay, port congestion, routes adjustments, etc. from time to time. As a result, the distribution of containers was partially unbalanced, and the effective supply of shipping capacity continued to decline, the freight rate in the international market remained high, and the global maritime logistics supply chain experienced frequent “disruption”.