The shipping industry is actively diversifying container production away from China, prompted by supply chain vulnerabilities exposed during the pandemic.
With over 95% of containers currently produced in China, manufacturers and government bodies across Asia and the US are establishing factories to reduce reliance on China, safeguarding global trade from supply chain strains and geopolitical tensions, says an article published on financial times website.
Geopolitical Shifts In Container Manufacturing
To mitigate over-reliance on Chinese production, factories are being set up in Vietnam, with the potential to produce a significant portion of the global container output. India is also witnessing new container manufacturing setups.
Impact Of Chinese Dominance On Container Production
China’s dominance in container manufacturing was highlighted during the pandemic when delays and shortages occurred due to slow production increases, causing disruptions in global trade.
National Security And Technological Advancements
The US is pursuing the development of “smart containers” with tracking technology and monitoring capabilities. Initiatives are underway to prevent China from consolidating control over container production, reflecting national security concerns.
Competition And Challenges In Diversification
While efforts are being made to shift container production away from China, challenges persist. Competing with China involves considerations such as lower costs, government support, faster production rates, and substantial capacity.
Response From Chinese Manufacturers
Chinese container manufacturers, although acknowledging the global expansion of production capacity, maintain that the market will become more competitive due to growing manufacturing capacity from other regions.
The diversification of container production is a response to concerns about over-reliance on China, geopolitical tensions, and disruptions in global trade. Efforts to establish manufacturing facilities in other countries aim to create a more balanced and competitive market in container production.
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Source: financial times
