The strategic and commercial importance of the Taiwan Strait
The Taiwan Strait is a strategic gateway for trade between China, Japan and South Korea, as well as for the rest of the world. Marco Orioles's article
In announcing the start of the massive air, naval and missile exercises around Taiwan that began on Thursday, the Chinese Ministry of Defense released a map with six zones around the island from which ships and planes were urged to stay away, with the result of inhibiting to commercial traffic an area, according to the calculation made by Sky News, of almost 10 thousand square miles.
Taiwan blockade?
It is for this reason that the Taiwanese government has stated that the Chinese exercises amount to a "sea and air blockade (which violates) the territorial waters of Taiwan and its contiguous area".
The effects on commercial traffic
As pointed out by Ispi, the Chinese decision produced inexorable direct effects on a commercial level. The Taiwan Strait is in fact “a strategic passage for trade between China, Japan and South Korea, as well as for the rest of the world”.
By choosing to conduct its maneuvers in one of the most used sea routes in the world, the People's Liberation Army imposed, continues the Ispi, "many commercial ships to circumnavigate the island, putting global supply chains under stress" .
The strategic importance of the Taiwan Strait
The importance of the 180km-wide Taiwan Strait to global trade cannot be underestimated. According to Bloomberg data cited by Corriere della Sera, half of the world's container fleet and 88% of the world's largest ships passed through the corridor that separates mainland China and Taiwan this year.
As Sky News notes, most of these vessels carry raw materials destined for East Asian industry or finished goods from the region to the rest of the world.
The anomaly of the Chinese exercises
It is common practice for shipping companies around the world to take military exercises into account when calculating their routes. However, as Emily Stausboll, analyst of the shipping services company Xaneta, points out to Sky News, it is completely unusual for drills to take place in areas so heavily exploited commercially.
Maritime traffic affected by exercises
The British commercial services consultancy VesselsValue calculated, with data reported by CNN, that at the time of the start of the Chinese exercises, 256 container ships and other commercial vessels were in the territorial waters of Taiwan. Another 60 were reported to arrive between Thursday and today.
As Niels Rasmussen, an analyst at the International Association of Shipping Companies BIMCO, pointed out to Sky News, “Ships will have to travel alternate and longer routes to reach Taiwanese ports and some vessels have already decided to sail east of Taiwan instead of cross the Strait ".
According to analysts and ship owners overheard by Reuters, the maneuvers on boats near Taiwan will force them to add about half a day to the length of their voyages.
As Braemar's head of research Anoop Singh told Reuters, oil tankers in the area have raised alarm levels and are rescheduling their routes.
Insurance companies have also issued warnings to their customers, urging them to use caution when sailing around Taiwan.
The port authority of Taiwan, CNN reports, issued three notices on Wednesday asking ships bound for the island's ports to follow alternative routes.
Effects on air traffic
As for the effects on air traffic, CNN itself reported how the Taiwanese authorities, after negotiations with Japan and the Philippines, redirected eighteen international flights to other routes. But three hundred, according to the Taiwanese Transport Minister Wang Kwo-tsai, the total flights forced to change course due to the exercises.
The potential consequences for trade
The consequences of all this are evident in the statements made to CNN by Peter Williams, analyst of trade flows at VesselsValue: "there is the potential for a substantial disruption of trade in the region".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/limportanza-strategica-e-commerciale-dello-stretto-di-taiwan/ on Sun, 07 Aug 2022 07:32:14 +0000.