East Asia Economic Outlook

Sam Ruda

Chief Commercial Officer

January 2013

East Asia Economies and the Port of Portland

China economy dominates or strongly influences a large share of the Port’s maritime activity:

Containerized cargo growth

Fertilizer exports

Soda ash exports

Grain exports

Automobile sector may initially be an export opportunity for U.S.

Ford plans to export to China beginning in 2014

Already exporting to S. Korea (via Portland)

Chinese imports of raw materials (iron ore, coal) drives vessel charter market (currently at historic lows)

U.S. West Coast Containerized Imports by Origin

From Asia

Source: Port Import Export Reporting Service

1990 – Container Imports from China

Hong

Kong

Keelung

Kaohsiung

• In 1990, there were 1.3 million TEUs (7.8 million MTs) of containerized cargo exported from China to the United States

• Primary ports were Hong Kong, Keelung and Kaohsiung

• Roughly half of the cargo coming to the U.S. was sourced in Taiwan

• Mainland China cargo transshipped to Hong Kong, or Busan for delivery to U.S.A.

• Five of the top 20 busiest container ports in the world were in the U.S.

Source: Port Import Export Reporting Service

2010 – Container Imports from China

• In 2010, there were 8.5 million TEUs (55 million MTs) of containerized cargo imported from China

• Now, there are nearly a dozen ‘hub’ ports in China exporting containers to the U.S.

• Over $200 billion in containerized imports

Hong

Kong

Keelung

Kaohsiung Shenzhen

Dalian

Tianjin

Qingdao

Ningbo

Xiamen Guangzhou

Shanghai

Source: World Shipping Council

Source: Journal of Commerce

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Source: Journal of Commerce

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Containerized Exports to Asia from U.S. West Coast

The East Asian Economies lead in purchasing from the U.S.

But some of what the U.S. exports can be sourced elsewhere

The fastest growing trade in the world is within Asia

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

China Japan S. Korea Taiwan Indonesia Vietnam Thailand Singapore Philippines Malaysia

U.S. Agricultural Export Recipients by Country

Source: U.S. Census Bureau, Foreign Trade Statistics Global Agricultural Trade System

Country 2006 2007 2008 2009 2010

China 6.7 8.3 12.1 13.1 17.5

Canada 12.0 14.1 16.3 15.7 16.9

Mexico 10.9 12.7 15.5 12.9 14.6

Japan 8.4 10.2 13.2 11.1 11.8

China is the largest recipient of U.S. Agricultural products by dollar value surpassing Mexico and Canada

2006 2007 2008 2009 2010

China $17.5 billion

Canada $16.9 billion

$6.7

Japan $11.8 billion

$8.4

$12

$10.9

Mexico $14.6 billion

$5

Agricultural Exports to China by Region

By total volume, bulk and container, primary gateways from the U.S. are the gulf and the Pacific Northwest

4%

44%

37%

15%

Source: PIERS Data

Columbia River Grain Exports

Source: Merchants Exchange

Columbia River Elevator Grain Exports

In Millions of Metric Tons

• Addition of new elevator in the river system will drive more cargo to the PNW

Auto Imports from Asia:

Imports as a % of total U.S. Sales is declining

High Yen is one factor…..but there are other strategic drivers

Rail Track Leads to Portland