Introduction

Maersk’s engagement with China spans a century and illustrates how foreign direct investment (FDI) can shape an economy well beyond direct capital inflows. The first Maersk ship to call on a Chinese port arrived in Shanghai in 1924. By 2014, Maersk employed 26,000 people in China and generated US$11 billion in China-related revenues. Between 1996 and 2014, Maersk estimates its direct investment and procurement in China exceeded US$15 billion.

Maersk’s impact has gone well beyond its employment and investment amounts, positioning the company as a connector, technology partner, logistics reformer, and enabler of China’s rise as the world’s leading trading nation. By combining shipping, port investment, supplier development, logistics services, and human capital training, Maersk exemplifies how multinational enterprises can exert systemic influence across an economy.

Connecting China to the world

Maersk Line has been central to China’s integration into global trade networks. From 2000 to 2012, Maersk increased its China port calls by 310% and container movements by 270%. By 2012, the company handled 13.3% of all containerized goods in China, accounted for 16.2% of all port calls, and transported 14.5% of containerized trade between China and its main trading partners.

Econometric analysis shows that shipping connectivity has measurable macroeconomic effects: a 10% improvement in maritime container transport was associated with a 3% reduction in Chinese trade costs, a 6% increase in manufactured imports, and a 9% increase in manufactured exports. Since 2004, improvements in liner shipping connectivity were linked to a 30% increase in manufactured imports and a 40% increase in exports – a quarter of cumulative trade growth over that period. In value terms, this equated to US$686 billion in additional trade.

Given its market share, a 10% improvement in Maersk Line’s services alone was associated with a 0.8% increase in Chinese imports and a 1.1% increase in exports. We estimate that growth in Maersk’s China-related capacity from 2004 to 2012 boosted China’s exports by US$120–135 billion per year. In 2012, Maersk carried an estimated US$206 billion in Chinese exports by sea, underscoring its pivotal role in export expansion.

Working with Chinese suppliers

Maersk played a formative role in China’s rise as a global shipbuilding power. When Maersk began ordering ships from China in 1996, China accounted for only about 4% of global ship deliveries. By 2014, that share had grown to 40%.

Between 1996 and 2014, Maersk ordered more than 117 ships from Chinese shipyards, with a cumulative value exceeding US$3.5 billion. Engineers were embedded in Chinese yards for months or years to transfer know-how and establish world-class production standards. Maersk was especially influential in developing product and chemical tankers, helping Chinese yards design vessels that could operate with 14 crew members instead of the previous 30–40.

Crucially, Maersk’s role diminished as Chinese capabilities matured. Its share of Chinese product and chemical tanker orders fell from half between 1998 and 2001 to under 3% between 2008 and 2013, indicating that Chinese yards had become globally competitive suppliers. Beyond shipbuilding, Maersk also worked with major equipment suppliers such as Shanghai Zhenhua Heavy Industries Co. (ZPMC) to improve crane design and operational performance.

Supplier development extended to social and environmental standards. Maersk implemented supplier audits and workshops in China focusing on health and safety, working hours, compensation, and environmental performance, embedding international compliance norms into Chinese supply chains.

Improving efficiency in ports and logistics in China

Maersk was an early investor in Chinese ports and remains deeply involved in port operations. By 2014, it had investments in major ports including Dalian, Guangzhou, Tianjin, Xiamen, Qingdao, and Shanghai – four of which ranked among the world’s ten most efficient container ports.

Operational improvements were driven through initiatives such as the Terminal Partnering Project, which sought to reduce vessel berthing times. The project identified potential reductions of 27%–40% in port stays, with 12%–18% already realized by 2014. A 30% reduction would save Maersk Line ships over 11,000 port hours annually, with benefits potentially 10 times larger if adopted across all carriers. Economists estimate that a 10% increase in container port efficiency can raise trade volumes by about 3.2%.

The logistics impact is equally significant. Logistics costs in China were estimated at 18% of GDP in 2012, compared with about 9% in North America and Europe. Improvements in logistics between 2007 and 2012 were associated with a 19% reduction in trade costs and a US$213 billion increase in trade value. Damco, Maersk’s logistics arm, achieved cost reductions of 10%–20% for clients and is estimated to have saved Chinese exporters over US$1.3 billion in logistics costs in 2014 alone.

Improving environmental performance in China

Maersk has also influenced environmental standards in shipping and logistics. Between 2007 and 2014, Maersk Line reduced carbon dioxide emissions per container by 34%, with a target of 40% by 2020. It was the first shipping company to adopt the Fair Winds Charter, reducing sulfur emissions by 80% through the use of low-sulfur fuels.

Efficiency gains in ports have environmental spillovers. A 30% reduction in berthing time at four major Chinese ports could save over 10,000 metric tons of fuel and 552 metric tons of sulfur dioxide annually for Maersk ships alone, and over 110,000 metric tons of fuel if replicated across other carriers.

Maersk also set high standards for ship recycling in China, helping establish environmentally responsible shipbreaking facilities. Although the company faced criticism for disposal practices elsewhere, it committed to raising standards globally. Damco further reduced emissions by redesigning supply chains, achieving carbon dioxide reductions of up to 27% in some cases.

Developing human resources in China

By 2015, most of Maersk’s 26,000 China-based employees, including management, were Chinese nationals. The company invested heavily in training programs covering operations, customer service, safety, and leadership.

Initiatives included training roughly 400 middle managers annually and a four-year leadership program for director-level staff that resulted in zero turnover among participants. Career progression stories – from graduate trainees in the early 1990s to regional heads by 2015 – illustrate long-term capability building.

Maersk also pioneered retention initiatives such as flexible working arrangements and childcare support, which increased female workforce participation. At the same time, the company faced labor disputes and reputational challenges during the 2008-09 downturn, prompting reforms in compensation, safety, and employee communication.

Economic impact of procurement and investment

Using China’s input–output tables, we estimate the cumulative economic impact of Maersk’s activities. Direct investment generated approximately US$21.5 billion in output, US$6.7 billion in value-added, and 991,000 in full time equivalents in job-years (1 job for one year, or an average of nearly 50,000 jobs each year over the period). Procurement contributed an additional US$25.8 billion in output, US$7.9 billion in value added, and 1.1 million in full-time equivalents in job-years (or an average of over 56,000 jobs each year over the period).

These figures highlight how a single multinational’s investment and purchasing decisions can ripple through the host economy, supporting tens of thousands of jobs annually over extended periods.

Conclusion

The Maersk case demonstrates how foreign companies can deliver value far beyond capital and jobs. By providing the infrastructure, knowledge, and global networks needed to access world markets, Maersk played a foundational role in China’s development as a leading trading nation. The study underscores the broader lesson that multinational enterprises facilitating connectivity can have economy-wide impacts that rival, or exceed, those of more visible manufacturers.

[This report contains an excerpt from a larger project initiated by the Hinrich Foundation and undertaken by Enright, Scott and Associates on the impact of foreign investment and foreign enterprises as a whole on China's economy. The results of the larger project were published in a book by Michael J. Enright, Developing China: The Remarkable Impact of Foreign Direct Investment (Routledge 2017).]

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