Insecurity in the Red Sea is causing numerous detours by merchant ships, which want to avoid attacks by Yemeni rebels. To the point of endangering China’s entire export chain.
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Security problems in the Red Sea, with Houthi attacks, are increasingly weighing on world trade. It is one of the busiest sea routes for merchant ships. And one of the countries most affected is China. Insecurity in the Red Sea is seriously disrupting the exports of 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 manufacture a large part of the small goods “made in China”. Before the Chinese New Year, the machine traditionally runs at full speed, goods must be exported as quickly as possible before the start of the holidays.
Warehouses full to bursting
But this year, the security situation in the Red Sea shook up the organization. It is necessary to make the detour via South Africa to avoid attacks. Ships are taking longer to return to China and goods are piling up in warehouses.
“Our customers are in a big hurry because they have a lot of goods to export and transport before the Chinese New Yearsays Wang Bingching, a manager of a large logistics company in Yiwu. But the frequency of ships is decreasing and transport time is increasing. So they can’t sell their goods before the New Year. We have a 7,000 m² warehouse on the edge of Yiwu and it’s full.”
“There is no more room in the containers. Traders are very worried.”
Wang Bingching, manager of a logistics companyat franceinfo
Beyond Yiwu, the entire Chinese economy, very dependent on exports, is affected. The port of Ningbo, south of Shanghai, one of the largest in the world, finds itself completely saturated. There are no longer enough containers and ships to ship the goods.
