Houthi attacks in the Red Sea penalize exports of the world’s second largest economy

Insecurity in the Red Sea is causing numerous detours by merchant ships, which want to avoid attacks by Yemeni rebels. Chinese exports are directly affected.

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 “made in China” goods found around the world. Before the Chinese New Year, the machine traditionally runs at full speed, because 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. Many ships are forced to detour via South Africa to avoid attacks and therefore take longer to return to China where goods accumulate 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 Bingqing, manager in a large logistics company in Yiwu. But the frequency of ships is decreasing and transport time is increasing. Customers are unable to sell their goods before the New Year. We have a 7,000 m² warehouse at Yiwu Port and it is full.”

“There is no more room in the containers. Traders are very worried.”

Wang Bingqing, manager at a logistics company

at 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.