PRC's Covid measures, "disappearing ships" prolong supply-chain crisis, Japan & Vietnam join cybersecurity efforts amid China concerns & Anti-China riots in Solomon Islands -- China Boss News 11.29.21
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China's "increasingly extreme" Covid measures & "disappearing ships" are prolonging the supply-chain crisis
“China’s increasingly extreme Covid Zero policies are standing in the way of a full recovery for the shipping industry and prolonging a crisis that’s snarled ports and emptied shelves worldwide,” two Bloomberg analysts warned in a detailed report Wednesday.
The analysts noted China’s lengthy and complicated quarantine procedures “for returning Chinese seafarers,” and interviewed shipping industry executives who are “calling for China to relax its restrictions." A "port congestion" graphic included in the report shows China with the highest "concentration of congested ports globally.”
Bloomberg:
In its attempts to keep the virus out, China’s continued to prohibit crew changes for foreign crew and recently imposed as much as a seven-week mandatory quarantine for returning Chinese seafarers. Even vessels that have refreshed their crew elsewhere have to wait two weeks before they’re allowed to port in China.
To comply, shipowners and managers have had to reroute ships, delaying shipments and crew changes, adding to the supply chain crisis. “China’s restrictions cause knock-on effects,” said Guy Platten, the secretary general of the International Chamber of Shipping, which represents shipowners and operators. “Any restrictions to ship operations have an accumulative impact on the supply chain and cause real disruptions.”
Even the largest operators are struggling with “vessels that r[u]n into demurrage [late fees],” long delays and “crew rotations.”
Bloomberg:
Euronav NV, one of the world’s largest owners of oil supertankers, has spent an estimated $6 million handling disruptions related to the crew change crisis, including the likes of deviations, quarantines and higher travel costs.
“In the past, it was pretty nice to do crew rotation when we were in China,” said Chief Executive Officer Hugo De Stoop. “And now basically it’s not possible.”
The industry has largely absorbed the extra costs with some of the highest container rates on record due to demand, capacity constraints and port congestion. At $9,146 per 40-foot container at the end of the week on Nov. 18, rates have soared six-fold compared to the five-year average through 2019. Rates for oil tankers and bulk carriers have not risen nearly as much.
Ship owners and operators also acknowledge that they are managing China’s restrictions by shifting the burden to the workers on board. Chinese authorities won’t allow more than three Chinese seafarers on a flight to the mainland, so their return home can be stretched to months after they’ve signed off from vessels, said Hojgaard.
Anglo-Eastern said as of this week, 555 out of its 16,000 active crew are overdue for relief, and nearly 60 have been on ships for more than 11 months, the maximum mariners are allowed by international law to be on board. “We are trying our best to get them off but can’t,” said Hojgaard.
Chinese authorities have been unwavering in their enforcement of Covid restrictions for foreign crews and have even refused entry to those with urgent medical issues, according to ship managers.
Bloomberg:
An Anglo-Eastern chief officer with a severe tooth abscess couldn’t get off his vessel for treatment. The ship had to divert to South Korea before he could see a dentist.
Yet another development is adding to global shipping woes: Beginning in October, industry analysts say, “ships in Chinese waters” disappeared from commercial tracking systems, CNN reported.
CNN:
Ships in Chinese waters are disappearing from industry tracking systems, creating yet another headache for the global supply chain. China's growing isolation from the rest of the world — along with a deepening mistrust of foreign influence — may be to blame.
Analysts say they started noticing the drop-off in shipping traffic toward the end of October, as China prepared to enact legislation governing data privacy.
Usually, shipping data companies are able to track ships worldwide because they are fitted with an Automatic Identification System, or AIS, transceiver.
This system allows ships to send information — such as position, speed, course and name — to stations that are based along coastlines using high-frequency radio. If a ship is out of range of those stations, the information can be exchanged via satellite.
But that's not happening in the world's second-largest economy, a critical player in global trade. In the past three weeks, the number of vessels sending signals from the country has plunged by nearly 90%, according to data from the global shipping data provider VesselsValue.
"We are currently seeing an industry wide reduction in terrestrial AIS signals in China," said Charlotte Cook, head trade analyst at VesselsValue.
Financial Times also said that China's "sensitiv[ity] to the sharing of geolocation data" and its new data protection laws are the most logical explanations for why ships suddenly went "dark" in the AIS tracking system.
FT:
The decline in AIS data is one of the first victims of China’s new data protection regime, which restricts transfers of sensitive information overseas. Companies wanting to send important data abroad need to undergo a security assessment with the country’s data watchdog.
Anastassis Touros, in charge of the AIS team at information provider MarineTraffic, said he did not believe that AIS data pose a risk to national security, and that military vessels often hide their location from the trackers.
…Touros said decreased visibility would likely cause more congestion at Chinese ports, which have been gridlocked amid poor weather and pandemic-related disruptions, because it would become harder to time vessel arrivals with low-traffic periods. But one shipping executive and two freight forwarders said it was unlikely that the lack of terrestrial AIS data would cause worse bottlenecks.
For Bloomberg’s report, Supply-Chain Crisis Only Getting Worse With China's 7-Week Port Quarantine, click here. For CNN’s update, China's disappearing ships: The latest headache for the global supply chain, click here. For FT’s report, China blocks access to shipping location data, click here.
Law and International Xi
Japan & Vietnam conclude cybersecurity agreement amid China concerns
Japan and Vietnam have concluded "a cybersecurity agreement” expected to further deepen the two nation’s “military ties amid concerns over China’s growing assertivenes," AP News reported.
The deal comes only two months after they struck a defense technology transfer deal allowing Vietnam’s procurement of weapons and technology from Tokyo.
Japan’s defense minister told reporters that the cyberspace arrangement is “aimed to address ‘a strong sense of urgency’ over activities in the Indo-Pacific region that challenge the existing international order . . . ”. He reiterated that talks with Vietnam “had taken ‘defense cooperation between the two countries to a new level.’”
AP News:
Japanese Defense Ministry says cyberattacks are part of rising security threats from China as it becomes more assertive in the region — a shared concern by the United States and other allies in the region.
Tokyo regularly protests the Chinese coast guard’s presence near the Japanese-controlled Senkaku islands, which China also claims and calls Diaoyu. Japanese officials say Chinese vessels routinely violate Japanese territorial waters around the islands, sometimes threatening fishing boats.
Kishi also said he raised concerns over the recent escalation of joint military activities by China and Russia near Japanese waters and airspace.
Kishi said a fleet of two Chinese H-6 fighters and two Russian Tu-95 flew from the Sea of Japan to the East China Sea and to the Pacific Ocean, triggering Japanese Self-Defense Force jets to scramble.
Chinese and Russian warplanes previously flew together around Japan twice in 2019, he added.
During the talks, Kishi expressed Japan’s strong opposition to “any unilateral attempts to change the status quo by coercion or any activities that escalate tensions,” referring to China’s increasingly assertive activity in the East and South China Sea.
For the rest of AP’s report, Japan, Vietnam look to cyber defense against China, click here.
US, Australia, Canada weigh diplomatic boycott of Beijing Olympics as similar calls in other countries grow after tennis star’s disappearance
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