While it’s unlikely to pull the U.S. economy into recession, China has severely rattled global financial markets again.
According to Nariman Behravesh, chief economist at IHS Global Insight, the recent China-induced financial volatility is the result of a “nasty cocktail” of major structural problems, slowing growth, and inept policies.
“This has spooked the markets and undermined confidence in Chinese policy makers,” says Behravesh.
At the same time, U.S. logistics managers have been reminded of how dependent they are on Chinese manufacturing and Chinese shipping—especially in the Pacific Rim. Amid this uneasiness, a new paper has surfaced to “spook” shippers.
“Sea Strangulation: How the United States has become vulnerable to Chinese maritime coercion,” authored by political scientist and expert on “coercive diplomacy” Dr. Patrick Bratton and retired U.S. Navy captain Carl Schuster, both of Hawaii Pacific University, details a challenge from China that the U.S. is ill-prepared to meet.
The paper outlines serious threats as a result of an over-dependence on the ships of other nations—in particular China—and simultaneous vulnerability caused by a dearth of American-flagged container vessels. The U.S. merchant marine now numbers less than 100 vessels in international trade. These privately-owned ships, flying under the U.S. flag, play a key role in supplying our armed forces overseas and delivering commercial goods at home.
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Source: SupplyChain Management Review – GAI