By Liam Gibson.
As the howl of missile fire pauses over the Taiwan Strait, a new enduring risk to global trade is surfacing.
Sustained shipping disruptions caused by frequent Chinese military activity around Taiwan could become what experts call a “new normal” for the crucial trade route.
As Beijing extended its military drills from Sunday through to Wednesday, Chinese state media reported exercises that transgress the strait’s median line would from now on be a “regular” event.
On Wednesday, China also released a new white paper on “reunification” with the self-governing island that issued specific warnings to “Taiwanese independence forces,” and detailed the role of the United States in counteracting China’s efforts towards that goal.
“We have now moved into a qualitatively new state of affairs and the resolution of the ‘Taiwan question’ is actively in motion,” Andy Mok, a senior research fellow at the state-backed Center for China and Globalization, told Al Jazeera. “We don’t know what the length or magnitude of the drills will be … some say the blockade has already started.”
The risk of escalation poses a grave challenge to international trade.
China’s drills, which were sparked by US House of Representatives Speaker Nancy Pelosi’s visit to the island last week, have demonstrated that Beijing has the capacity to inflict enormous disruption to global trade flows should it so choose.
Already this year about half of the world’s container fleets and nearly 90 percent of its largest vessels by tonnage have passed through the Strait, which facilitates the flow of goods between East Asia and global markets.
Shipping data showed vessels had largely resumed their normal routes through the strait this week. But if China’s military activities evolve into an ever-present risk, the industry may find itself scrambling for contingency plans.
Peter Sand, the chief analyst at shipping intelligence platform Xeneta, said finding alternatives to the Strait would come with a significant price tag.
Source: Al Jazeera