The conflict in the Middle East has impacted China’s exports due to shipping disruptions, leading to a backlog of goods in local warehouses. The Chinese city of Yiwu, a major supplier of household and electronic products to US retail giants like Amazon and Walmart, as well as the Middle East, is facing challenges. Rising shipping costs, now five times higher at $6,000 per container from $1,200, and risks to commercial ships due to the Iran war have deterred importers from purchasing Chinese goods, exacerbating the inventory buildup.
Importers are hesitant to transport goods amidst safety concerns arising from attacks on commercial shipping in the Middle East. Recent incidents, such as an oil tanker being hit in the Persian Gulf, underscore the perceived risks. Yiwu, in Eastern China, serves as a microcosm of how the Iran conflict and the blockade of the Strait of Hormuz are disrupting global supply chains.
The Middle East accounts for approximately 30% of goods exported from Yiwu, according to local businessmen cited in the report. Beyond the export challenges, China’s energy sector is also feeling the impact, being a significant buyer of Iranian oil. Furthermore, disruptions in liquefied natural gas (LNG) supplies from Qatar, a major source for China, due to air attacks on gas facilities in the Middle East, have added to the strain.
