The current political upheavals in the world has led to much uncertainty for business leading to reduced trade globally and a nervous hesitancy to engage in new projects in many fields. Logistics is particularly challenging. By sea effective closure of the Red Sea passage and more recently the Straits of Hormuz have lead to displacement of shipping, shortages and longer transit times all leading to increased costs, although not to the level seen during Covid. By air closure of airspace to commercial traffic in area of the middle east and Ukraine has resulted in longer routing and reduced capacity all leading to increased costs.
So with this in mind why is now a positive time to increase trade with China? The downturn in world economies and the rise in punitive trade tariffs levied by some countries on Chinese goods has resulted in a reduced growth in their economy compared to recent history. There is also a surplus of available labour with unemployment above historical norms particularly in the 18 – 25 year age group. This all leads to downward pressure on manufacturing costs and with careful negotiation competitive prices can be achieved. China remains a highly advanced manufacturing base having invested heavily in infrastructure and the latest manufacturing techniques making it a highly desirable place to source products from despite these headwinds.
At a time when basic material costs (including oil) are rising it has never been more important to control costs. China should not be ignored and with our help trading safely and securely with China is a good prospect.
China Trade in the Current Geopolitical Upheavals
