China calls for better coordination to stabilize shipping in Red Sea

Release time：2024-05-21 13:13:39 Source：Stellar Signals news portal

China has called on relevant parties to restore and ensure the safety of the Red Sea maritime passage to jointly uphold the smooth operation of global supply chains and the normal order of international trade, said the Ministry of Commerce on Thursday.

Speaking at a weekly news conference in Beijing, He Yadong, a ministry spokesman, said the Red Sea is an important international trade route. The ministry will strengthen coordination with other government branches, closely monitor the situation in the region, and provide timely support and assistance to Chinese companies.

The current reluctance of many global shipping companies to transit through the Suez Canal has affected China-Europe trade and exerted pressure on operational costs of businesses on both sides.

When containerships avoid the Suez Canal and instead navigate around the southern tip of Africa, it considerably increases sailing costs, extends shipping durations and creates cascading delays in delivery schedules.

Starting from mid-December, due to security concerns in the Red Sea region, there has been a significant increase in prices for global maritime shipping and air freight services, as well as China-Europe Railway Express operations, said Zhou Zhicheng, director of the research department at the Beijing-based China Federation of Logistics and Purchasing.

The escalation of the situation in the Red Sea region will impact shipping between Asia and Europe in the first quarter, leading to concerns about the possibility of a resurgence in container shortages, said Chen Zhen, an analyst at the research institute of Founder CIFCO Futures, which has 36 branches across China.

Because of the intricate and interrelated nature of the situation in the Red Sea region, Chen said that substantial uncertainty will persist for the coming months, and it is expected that shipping rates will consequently exhibit greater volatility.

Japan's three major shipping groups — Nippon Yusen, Kawasaki Kisen Kaisha and Mitsui OSK Lines — also announced on Wednesday they will suspend routes through the Red Sea waterway to ensure operational safety.

In another development, as China and Switzerland jointly announced that they had completed a joint feasibility study on upgrading the China-Switzerland Free Trade Agreement and agreed to support the early launch of formal FTA upgrade negotiations early this week, He, from the Ministry of Commerce, said that both China and Switzerland will proceed with their respective domestic procedures with the aim of initiating negotiations to upgrade the FTA as soon as possible.

The two sides will engage in in-depth discussions in various areas, including goods trade, trade in services, investment and rules, as well as focus on crafting a high-level upgraded agreement to bring greater benefits to businesses and people in both countries, he added.

Since 2010, China has been Switzerland's biggest trading partner in Asia and third largest globally after the European Union and the United States, according to information released by the Swiss government.

Despite the disruption in global supply chains, weakening demand in many countries and geoeconomic challenges, the trade value between China and Switzerland grew by 9 percent year-on-year to 416.93 billion yuan ($57.94 billion) in 2023, said China's General Administration of Customs.

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