Page 47 - Practical Design Ships and Floating Structures

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that the world economy is heading for a third golden age after pre-WWI period and 1950-1973 period,
with world average at around 4%.
(2) With major breakthrough in service trade liberalization, world trade will keep a steadfast
development characterized by openness, fair competition and steady growth.
Openness: The three fundamental agreements of telecommunication, IT and financial services settled
under WTO framework, which is distinguished by wide coverage and rapid opening up process, mark
the penetration of world trade liberalization from cargo trade to service trade. Regional economic
organizations have expedited the process of economic corporation. Special attention should be paid to
Euro which embodies the voluntary delegation of national sovereignty of the member states, which is
unprecedented in modem history. It will definitely cast profound influence on global and regional
economic integration. Moreover, modem IT has already grew out of the traditional concepts of time
and space. The interaction of technological advance and trade liberalization has enlarged the economic
arena of many countries.
Competition: There is an intensified rivalry on market, assets and resources. The Southeast Asian
financial crisis has triggered the reshuffle of world trade relations. And the competition among
developing countries has become fiercer. The US’ sustained attack on external trade has resulted in
constant friction with Japan, Europe and new economies. Traditional trade protectionism, though still
in low profile, will find its way in the WTO clauses. Raised technological and environmental standards
have formed ‘green barrier’. Those developing countries find their competitive edge blunted when low
salary fails to bring about advantages. Things like policy, law and institutional system, which used to
fall into the category of national sovereignty, have become the new focus for international trade.

The openness and fair competition will contribute to the steady development of world trade. The
concepts of market, trade liberalization, and technological information, as well as cross border
management of those multinational companies, cross border M&As and development of regional
organizations have sped up the free flow of commodity, service, asset, technology, human resources
and information in the world. The optimization of the allocation of resources, mer classification of
the jobs, and the expansion of market capacity will definitely push forward the steady development of
world trade. It is estimated that world trade will grow at 6-7% on a year-on-year basis, 2-3 percentage
higher than the growth rate of world economy. Service trade will grow 1-2 percentage faster than cargo
trade.
2 FEATURES OF SHIPPING INDUSTRY AT THE TURN OF TWENTY-FIRST CENTURY

The development of the global shipping industry mainly depends on the development of the
international trade, and the development of international trade is mainly based on the development of
the international economy and politics. In a short time, the global shipping industry is usually effected
by some bursting forth incidents in the international economy and politics. But in the long run, the
development of the global shipping business mainly depends on the general trend of international
economy and trade. We can see the features of shipping industry at the turn of the twenty-first century
as below:
(1) The volume of the international trade will continue to grow steadily; the freight rate and
quality of the transportation required will be increased constantly.

With the global economic technology developing quickly, the knowledge contained in merchandise
and the value added in is increasing apparently. Therefore the volume in tons per unit in GDP is
decreasing, which causes the increasing rate of the shipments in tons lower in a short time. But in a
long term the volume of the international trade will continue growing steadily as a result of
globalization, the freight rate will increase, and the quality of transportation increases as well. In the