China Concerned About Tensions in the Red Sea

China, the world's largest exporter, has expressed deep concern over the escalating tensions in the Red Sea, which have disrupted global trade due to the need for many shippers to avoid the Suez Canal.

In a daily briefing on Wednesday, Foreign Ministry spokesperson Wang Wenbin stated that China had been actively engaging in "close communication with all parties concerned" and making efforts to de-escalate the situation. He called for a halt to harassment and attacks on civilian ships and urged all relevant parties to refrain from exacerbating the situation in the Red Sea, emphasizing the importance of ensuring the safety and security of the route.

Since November, Iran-backed Houthi rebels have launched at least 34 attacks on ships traveling through the waterways leading to Egypt's Suez Canal. This vital route facilitates the transportation of energy and cargo between Asia, the Middle East, and Europe. Wang said that China is deeply concerned about these recent escalations and emphasized the significance of the Red Sea as an international trade route for goods and energy.

The Houthis, a Shiite rebel group controlling Yemen's capital Sanaa since 2014 and engaged in a war with a Saudi-led coalition supporting Yemen's exiled government since 2015, have connected their attacks to the Israel-Hamas conflict. However, the ships targeted by these attacks increasingly have no or limited links to Israel.

Wang also linked the Gaza conflict to the tensions in the Red Sea, stating that ending the fighting in Gaza is a priority to prevent further escalation and maintain control over the situation. He expressed China's willingness to collaborate with all parties involved to de-escalate tensions and uphold security and stability in the Red Sea region.

China's total export value exceeded $3.5 trillion in 2022, surpassing that of the United States by approximately $1.5 trillion, securing its position as the world's second-largest exporter.

Tags: China, Red Sea, trade, Suez Canal, tensions, Houthi rebels, missiles, international ships, safety, security, Egypt, Iranian-backed, Yemen, Shiite rebels, Sanaa, Saudi-led coalition, Israel-Hamas war, international trade route, goods, energy, Gaza conflict, de-escalation, stability, exporter

The Changing Trade Routes: A Shift Around Africa

The global shipping industry has witnessed a significant change in recent times, as some of the largest container shipping companies and even oil giant BP have opted to send their vessels on longer journeys around Africa instead of utilizing the traditional route through the Red Sea. In response to the growing impact on global trade, the United States, along with several other nations, has formed a new task force dedicated to protecting these ships.

Reports suggest that as much as 90% of container ships that previously traversed the Suez Canal are now rerouting their journeys, taking the path around Africa and the Cape of Good Hope. This shift has undoubtedly brought about various implications for international trade and commerce.

One of the immediate consequences has been a noticeable increase in shipping costs. The Kiel Institute for the World Economy in Germany reveals that it now costs $4,000 to ship a standard 40-foot container from China to northern Europe, a significant surge from its previous cost of $1,500. However, this figure is still considerably lower than the peak of $14,000 observed during the height of the pandemic.

Moreover, these rerouted voyages have resulted in extensive delays, leading to a decline of 1.3% in world trade in December. This downturn can be primarily attributed to goods being stuck on ships rather than efficiently offloaded at their respective port destinations.

The United States and its allies have taken decisive actions against targets deemed responsible for attacks on American forces in Iraq and Syria. Additionally, they have identified threats posed to both military and commercial vessels in the Red Sea. This concerted effort aims to safeguard these important shipping lanes and ensure regional stability.

China, on the other hand, has established strong ties with Iran, primarily through investments and oil imports. In recent times, China even facilitated talks between Iran and Saudi Arabia, resulting in the restoration of diplomatic relations between the two nations. While Beijing seeks to play a peacekeeping role within the Middle East, its reluctance to align with any particular side has sparked criticism and diminished its credibility.

As the global shipping dynamics continue to evolve, it remains crucial to closely monitor these developments and their implications on international trade and geopolitical relationships.