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The insecurity in the Red Sea is leading to numerous detours by merchant ships trying to avoid attacks by Yemeni rebels. Up to and including endangering China's entire export chain.
Published on January 23, 2024 12:04 p.m
Reading time: 1 min
An employee at a warehouse in Yiwu, China, October 11, 2023. Illustrative image. (LI MUZI/XINHUA)
Security problems in the Red Sea and Houthi attacks are increasingly putting a strain on global trade. It is one of the busiest sea routes for merchant ships. And one of the hardest hit countries is China. Insecurity in the Red Sea is seriously affecting exports in the world's second-largest economy.
The Yiwu market in the southeast of the country is the temple of Chinese exports. Hundreds of factories here produce the majority of small goods “made in China”. Before the Chinese New Year, the machine traditionally runs at full speed and the goods have to be exported as quickly as possible before the start of the holidays.
The warehouses are full to bursting
But this year, the security situation in the Red Sea rocked the organization. The detour via South Africa is necessary to avoid attacks. The ships are taking longer to return to China and goods are piling up in warehouses.
“Our customers are in a hurry because they need to export and transport a lot of goods before Chinese New Year,” said Wang Bingching, a manager at a major logistics company in Yiwu. “But the frequency of ships is decreasing and the transport time is getting longer and longer. Therefore, they cannot sell their goods before the New Year. We have a 7,000 m² warehouse on the outskirts of Yiwu and it is full.”
“There is no more space in the containers. The traders are very worried.”
Wang Bingching, manager of a logistics company
at franceinfo
Beyond Yiwu, the entire Chinese economy, which is heavily dependent on exports, is affected. The port of Ningbo, south of Shanghai, one of the largest in the world, is completely overloaded. There are no longer enough containers and ships to transport the goods.
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