Christopher Yip, the head of local government, infrastructure, and utility ratings at S&P Global, believes that USA tariffs will significantly drag down cargo volumes for Chinese port companies (especially on China-USA routes), while also impacting the operational performance of various ports. However, S&P Global considers that Chinese port companies currently still have enough financial space to cushion against related bad factors.
He explained that the aforementioned forecast mainly considers three key factors: the Chinese port operating enterprises have established a strong financial buffer through good cargo volume growth and proper expense management over the past few years; the route combinations of related enterprises are not all focused on the USA market, with most companies holding a fairly diverse range of routes and expanding into Southeast Asian markets over the past few years; and the redirection of Chinese goods to markets such as Southeast Asia may bring a temporary increase in cargo volumes for related port companies in the short term, while also helping to stabilize cargo volumes.
He also added that if USA tariffs on China are not adjusted in the coming year or more, it will create different scenarios for the overall operational performance of Chinese port companies. However, considering that related enterprises have the support of the central government, there are currently no major concerns.
