Reports of mass global shift from China are being 'overplayed'

© Alexlmx

Reports of China losing its position as the world’s manufacturer, as shippers look to source elsewhere, have been “greatly exaggerated”, according to the director of the Global Shippers Forum, James Hookham.

He told The Loadstar the concept of reshoring was “being overplayed” in the media and, while there was “some movement”, it was marginal and driven more by concerns for contingency rather than replacement.

“China is just too big, too capable and it makes good stuff, and it has been doing so for a long time,” he said.

“A lot of the talk around decoupling and reshoring is tied to the potential of an escalation in tension with Taiwan, but there is a lot of expertise out there saying that, given China’s own economic position, this will not happen because it would destroy its export economy.”

“It can be presumed that any military escalation would quickly shut off merchant shipping’s access to the South China Sea – the biggest export corridor in the world,” Mr Hookham said.

Supply chain analysis provided by Trade Data Service (TDS) also does not support claims of significant global shift, but does indicate that the US and Europe are making some moves.

And CMA CGM CEO Rodolphe Saade told the UK Financial Times: “We’ve clients telling us they do not want to put all their eggs in one basket, in China. So, they are looking for other solutions. The movement has begun, but not yet at large volumes. It will take time.”

Mr Saade suggested it would be dependent upon the likes of India and South-east Asian alternative sources developing the facilities to not only hugely increase manufacturing capability, but also to move goods – and even then, Mr Hookham felt, “you’d need a really persuasive reason to drop China”.

He acknowledged relations between China and the US had become strained in recent years, not least after then president Trump’s imposition of steel tariffs. But since Russia’s invasion of Ukraine and its western support, there have been signs emerging of improved China-US relations.