Chaos Strikes Global Shipping, Chinese exports surge, China warns Biden administration
Monday Morning Wake Up Call
March 8, 2021
‘I’ve Never Seen Anything Like This’: Chaos Strikes Global Shipping
(NYTimes) Off the coast of Los Angeles, more than two dozen container ships filled with exercise bikes, electronics and other highly sought imports have been idling for as long as two weeks.
In Kansas City, farmers are struggling to ship soybeans to buyers in Asia. In China, furniture destined for North America piles up on factory floors.
Around the planet, the pandemic has disrupted trade to an extraordinary degree, driving up the cost of shipping goods and adding a fresh challenge to the global economic recovery. The virus has thrown off the choreography of moving cargo from one continent to another.
At the center of the storm is the shipping container, the workhorse of globalization.
Americans stuck in their homes have set off a surge of orders from factories in China, much of it carried across the Pacific in containers — the metal boxes that move goods in towering stacks atop enormous vessels. As households in the United States have filled bedrooms with office furniture and basements with treadmills, the demand for shipping has outstripped the availability of containers in Asia, yielding shortages there just as the boxes pile up at American ports.
Containers that carried millions of masks to countries in Africa and South America early in the pandemic remain there, empty and uncollected, because shipping carriers have concentrated their vessels on their most popular routes — those linking North America and Europe to Asia.
And at ports where ships do call, bearing goods to unload, they are frequently stuck for days in floating traffic jams. The pandemic and its restrictions have limited the availability of dockworkers and truck drivers, causing delays in handling cargo from Southern California to Singapore. Every container that cannot be unloaded in one place is a container that cannot be loaded somewhere else.
“I’ve never seen anything like this,” said Lars Mikael Jensen, head of Global Ocean Network at A.P. Moller-Maersk, the world’s largest shipping company. “All the links in the supply chain are stretched. The ships, the trucks, the warehouses.”
Economies around the globe are absorbing the ripple effects of the disruption on the seas. Higher costs for transporting American grain and soybeans across the Pacific threaten to increase food prices in Asia.
Empty containers are piled up at ports in Australia and New Zealand; containers are scarce at India’s port of Kolkata, forcing makers of electronics parts to truck their wares more than 1,000 miles west to the port of Mumbai, where the supply is better.
Rice exporters in Thailand, Vietnam and Cambodia are forgoing some shipments to North America because of the impossibility of securing containers.
The chaos on the seas has proved a bonanza for shipping companies like Maersk, which in February cited record-high freight prices in reporting more than $2.7 billion in pretax earnings in the last three months of 2020.
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Chinese exports surge as global demand recovers from virus
(AP) — China’s exports surged 60.6% over a year earlier in the first two months of 2021, after factories reopened and global demand started to recover from the coronavirus pandemic.
Exports rose to $468.9 billion, customs data showed Sunday, accelerating from December’s 18.1% gain and nearly double the growth expected by forecasters. Imports jumped 22.2% to $365.6 billion, up from December’s 6.5% increase.
Chinese authorities combine trade data for the first two months to compensate for fluctuations due to the Lunar New Year holiday, which falls at different times each year in January or February. Factories shut down for up to two weeks, then restock after they reopen.
Exporters benefited from the relatively early reopening of China’s economy after the ruling Communist Party declared victory over the disease last March while foreign competitors still face anti-virus controls.
Forecasters say the Chinese export surge should decelerate as demand for masks and other medical supplies eases and overseas competitors return to global markets. Trade officials have warned that the global situation still is “grave and complex.”
Exports to the United States soared 87.3% over last year to $80.5 billion in January and February despite former President Donald Trump’s tariff hikes imposed in a fight over trade, technology and security. They have been left in place by his successor, Joe Biden, who took office in January.
Economists and political analysts expect few changes under Biden due to widespread frustration in Washington with China’s trade and human rights records and complaints about technology theft and spying.
On Friday, China’s top economic official, Premier Li Keqiang, announced plans to accelerate technology development and reduce reliance on other countries. That threatens to worsen strains with Washington and Europe, which complain Beijing violates its market-opening pledges by shielding its suppliers from competition.
The latest trade figures look especially dramatic compared with early 2020, when the ruling party shut factories to fight the virus and trade plunged.
Then, global exports tumbled 17.2% in 2020′s first two months from the previous year. Exports to the United States plunged 27.7%.
Li announced an economic growth target of “over 6%” this year, which should help to propel demand for foreign oil, iron ore, food, consumer goods and other imports.
Beijing promised to buy more American soybeans, natural gas and other exports in the “Phase 1” agreement last January aimed at ending the tariff war. The two sides agreed to postpone more tariff hikes, but penalties on billions of dollars of each other’s goods remain.
China fell behind on meeting those commitments but started to catch up as demand rebounded.
This year, China’s global trade surplus for January and February was $103.3 billion, compared with a $7.1 billion deficit in the same period last year.
Imports of U.S. goods rose 66.4% to $29.3 billion. China’s trade surplus with the United States narrowed by 17.7% from the same time last year to $20.9 billion.
Exports to the 27-nation European Union rose 62.6% over January and February last year to $73.7 billion. Imports of European goods gained 32.5% to $45.9 billion.
China Tells Biden to Reverse 'Dangerous Practice' on Taiwan
(AP) — China’s foreign minister warned the Biden administration on Sunday to roll back former President Donald Trump’s “dangerous practice” of showing support for Taiwan, the island democracy claimed by Beijing as its own territory.
The claim to Taiwan, which split with the mainland in 1949, is an “insurmountable red line,” Wang Yi said at a news conference during the annual meeting of China’s ceremonial legislature.
The United States has no official relations with Taiwan but extensive informal ties. Trump irked Beijing by sending Cabinet officials to visit Taiwan in a show of support.
“The Chinese government has no room for compromise,” Wang said.
“We urge the new U.S. administration to fully understand the high sensitivity of the Taiwan issue” and “completely change the previous administration’s dangerous practices of ‘crossing the line’ and ‘playing with fire,’” he said.
President Joe Biden says he wants a more civil relationship with Beijing but has shown no sign of softening Trump’s confrontational measures on trade, technology and human rights. Surveys show American public attitudes turning more negative toward China, which is seen as an economic and strategic competitor.
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