China Faces Dilemma As Red Sea Shipping Attacks Persist

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  • As attacks on Red Sea shipping by Yemen’s Houthi rebels continue, China finds itself in a challenging position, balancing economic interests and geopolitical considerations.
  • While the Houthis promise safe passage for vessels from China, recent incidents, such as the missile attack on a Russian oil tanker, raise concerns about the accuracy of target identification.
  • China, primarily concerned about rising shipping costs and disruptions to energy commodities transport, grapples with the economic fallout.

Economic Impact on Shipping and Energy

With ships avoiding the Red Sea, trade through the Suez Canal has fallen by 42% in the last two months, resulting in increased shipping costs and extended transit times. The Shanghai-Northern Europe route’s freight rate has tripled since December 2023, exceeding $3,000 in January. China faces challenges not only in terms of economic costs but also disruptions to energy commodities transport. Liquefied natural gas shipments via the Red Sea have been briefly paused, and shipping through the Panama Canal faces restrictions due to lower water levels.

Geopolitical Considerations and China’s Response

China’s response to the Red Sea situation reflects its broader role in global affairs. Despite a warming relationship with Iran, China has supported resolutions condemning the Houthi rebels in Yemen. However, China has yet to join the US-led mission to escort ships in the Red Sea actively. Reports suggest China has started deploying naval vessels to escort Chinese cargo ships, indicating a shift in its approach. Pressure is mounting for China to take more decisive action and contribute to safeguarding the Red Sea.

US-China Coordination and Opportunities for Cooperation

While tensions between the US and China have limited opportunities for cooperation, the Red Sea crisis presents a potential breakthrough. Stable trade, energy flow, counterterrorism efforts, and regional stability are common interests for both nations. The crisis offers an opportunity for US-China coordination, drawing on their mutual concerns about supply chains and energy supply. Negotiations for establishing frameworks and mechanisms for military responses in the local area could pave the way for constructive collaboration.

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Source: SCMP