Freight News, Sea

China’s Taiwan sabre-rattling could affect shipping – but effect will be limited, says expert

[ August 4, 2022   //   ]

China’s military activity in the Taiwan Strait could affect global supply chains says shipping technology firm Container xChange.
China mounted a series of intensive drills in the region, including firing missiles, to show its displeasure at US House Speaker Nancy Pelosi’s visit to the island nation, which Beijing regards as a breakaway province of Greater China. It has striven over the decades to prevent other countries from recognising Taiwan as a nation.
Container xChange points out that nearly half the world’s container ships passed through the narrow Taiwan Strait which separates the island from the Chinese mainland in the first seven months of this year.
Co-founder and chief executive Christian Roeloffs, said: “The global supply chain is interconnected and all the major stretches like Taiwan Strait are nerve centres of these value chains. And if any one stretch is blocked, the undercurrents are felt across the system. Especially at a time when the industry is busy shipping cargo for the peak season, the impact will be reverberated across. What will decide the degree of impact is the tenure of this disruption.”
But he added that the supply chain has built resilience over the past two years, saying: “A case in point, we were expecting lockdowns in China (that lasted two months) to impact the peak season. However, we do not see any such disruption, especially on container prices. Therefore, it will be very difficult to forecast the degree of impact that this show of strength by China will cause.”
He said the immediate impact will be rerouting of the vessels through the eastern side of the island which will add a few days to voyages.