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Maersk optimistic about China business

Xinhua, August 14, 2015 Adjust font size:

Danish shipping and oil giant Maersk Group is optimistic about business prospects in China despite the global trade downturn and question marks over the impact of the recent weakening of the Chinese currency, a company executive said on Friday. ( The group's revenue has roughly doubled since 2009 in China, which is the largest cargo origin for its container shipping business, said Tim Smith, chairman of Maersk China and chief representative of Maersk Group North Asia, at a press briefing.

Business in the country is continuing to flourish, and Maersk sees opportunities in the economy's transition to consumption and service-led growth as well as in the Belt and Road regional trade and infrastructure network proposed by China, Smith told reporters.

"China is big and important, and that will continue to be the case in future," he said.

The chairman also called devaluation of the yuan in recent days "overall a good thing."

"We don't know the trend yet but it will boost China's exports, and that's helpful to our business generally," he said.

China's exports in July slumped 8.9 percent year on year, compared with a 2.1-percent increase in June. Imports slipped 8.6 percent.

Smith described July as "not a typical month" due to the influence of commodity price fluctuations, and said he expected improvement in China's exports in the coming quarter helped by the yuan's depreciation.

Maersk Line, the group's biggest business unit and the world's largest container shipping company, reported lower quarterly profits as shipping overcapacity dented freight rates, especially in Asia-Europe trade.

The overall seaborne trade volume between Asia and Europe fell by an estimated 3 percent year on year in the first half, but shipping capacity rose a lot more than that, Smith said.

Maersk Line's underlying profits declined 8.1 percent year on year to 499 million U.S. dollars in the second quarter. But it outperformed the market by reducing costs and improving bunker efficiency, with the return on invested capital reaching 10.1 percent, according to financial results released on Thursday

The Maersk Group obtained 1.1 billion U.S. dollars of underlying profits in the second quarter, down 8.3 percent from a year earlier, the results showed. Endi