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Disappearing ships in China: the latest headache for the global supply chain

2021-11-24T12:22:43.220Z

Ships in Chinese waters are disappearing from industry tracking systems, creating another headache for the global supply chain.



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Hong Kong (CNN Business) -

Ships in Chinese waters are disappearing from industry tracking systems, creating another headache for the global supply chain.

China's growing isolation from the rest of the world, coupled with a rising distrust of foreign influence, may be the reason.

Analysts say they began to notice the drop in maritime traffic in late October, as China was preparing to enact legislation governing data privacy.

Shipping data companies are generally able to track ships around the world because they are equipped with an automatic identification system or AIS transceiver.

This system allows ships to send information, such as position, speed, heading and name, to stations located along the coasts using high frequency radio.

If a ship is out of range of those stations, the information can be exchanged by satellite.

But that is not happening in the world's second-largest economy, a key player in world trade.

In the past three weeks, the number of ships sending signals from the country has plummeted by almost 90%.

This, according to data from the global shipping data provider VesselsValue.

"We are currently seeing industry-wide downsizing of terrestrial AIS signals in China," said Charlotte Cook, chief business analyst at VesselsValue.

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New data law could worsen supply chain chaos

When asked about the issue, China's Foreign Ministry declined to comment.

The State Council Information Office, which acts as the cabinet's press office, did not immediately respond to a request for comment on why shipping providers were losing access to the data.

But analysts believe they have found the culprit: China's Personal Information Protection Law, which took effect on November 1.

It requires companies that process data to receive approval from the Chinese government before they can allow personal information to leave Chinese soil, a rule that reflects the fear in Beijing that such data could end up in the hands of foreign governments.

The law does not mention shipping details.

But Chinese data providers could be withholding information as a precautionary measure.

So said Anastassis Touros, AIS network team leader at Marine Traffic, a leading provider of ship tracking information.

"Whenever there is a new law, we have a period of time in which everyone has to check if things are okay," Touros said.

Other industry experts have more clues about the influence of the law.

Cook said his colleagues in China told him that some AIS transponders were removed from stations located along the Chinese coastline earlier this month, on instructions from national security authorities.

The only systems allowed to remain must be installed by "qualified parties."

Not all data has been lost - satellites can still be used to capture ship signals.

But Touros said that when a ship is close to shore, the information collected in space is not as good as that which can be collected on land.

"We need ground stations to have a better image, a higher quality image," he added.

Global supply chain under "great stress"

With the arrival of Christmas, the loss of information from mainland China, home to six of the 10 busiest container ports in the world, could create more problems for an already troubled global shipping industry. Supply chains have been under pressure this year as heavily congested ports struggle to keep up with rapidly recovering demand for goods.

Shipping companies rely on AIS data to predict vessel movement, track seasonal trends and improve port efficiency, according to Cook of VesselsValue.

He said the lack of Chinese data "could significantly affect the visibility of the ocean supply chain in China."

The country is one of the world's leading importers of coal and iron ore, as well as a large exporter of containers.

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"As we head into the Christmas season, it will have a really big impact on [supply chains] and this is the most important element right now," said Georgios Hatzimanolis, media strategist at Marine Traffic.

He expects China's "minute-by-minute" loss of ship data to have "a huge impact on the supply chain."

This, because companies can lose crucial information about the times of docking, unloading and departure of ships.

The global supply chain is already under "great stress," he added.

"You don't need another factor to make it more difficult."

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China's self-isolation

China's desire to retain absolute control over all data and information within its borders is not surprising.

President Xi Jinping continues to reaffirm the dominance of the ruling Communist Party in all aspects of the economy and society.

The country has been pushing for economic self-sufficiency while facing external threats, such as US sanctions on key technologies.

Xi emphasized his self-reliance goals in the years before and during a bitter trade and technology war with former US President Donald Trump.

That's the point, for example, of "Made in China 2025," an ambitious plan to propel China's manufacturing sector into more advanced tech fields.

Some senior Beijing officials have recently tried to quell concerns among global investors that the country is isolating itself from the rest of the world by prioritizing national security.

Chinese Vice President Wang Qishan, considered a trusted ally of Xi, told the Bloomberg New Economy Forum in Singapore that China would not "develop in isolation from the world."

Speaking by video, he also called on countries to keep supply chains "stable and fluid."

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But China has adopted policies during the coronavirus pandemic that often appear to do the opposite.

China's "independent and controllable" supply chains

For example, during the pandemic, Xi has redoubled his drive for self-reliance.

It has emphasized the need to create "independent and controllable" supply chains to ensure national security.

And the country's radical crackdown on technology extended this summer to foreign IPOs.

The China Cyberspace Administration has proposed that major companies with more than one million clients seek approval before listing stocks abroad.

As with the recent data privacy law, the agency cited concerns about whether personal data held by those companies could be exploited by foreign governments.

However, China's actions this year may come at a cost if the country goes too far in trying to protect itself from perceived foreign interference.

CNN's Beijing office contributed to this report.

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Source: cnnespanol

All news articles on 2021-11-24

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