World shipping appears to benefit from China's rivalry with India and Japan
 There is an awareness in shipping today of growing rivalry among regional rivals in Asia, with an important input from the United States.
Allied with the US are India and Japan, both of which are wary of China and have formed economic and even military alliances with America just as China has made similar arrangements with Pakistan, Bangladesh and Indonesia.
This presents challenges and opportunities to world shipping - challenges if a flash point should flare up to disrupt trade flows while offering opportunities as each goes to great lengths to outproduce the other, creating fresh demand for shipping.
First among China's rivals, and the one with the greatest immediate potential is India, especially with its new laissez-faire government so bent on making India a modernised urban state.
And while Japan seems to many to be past its prime, yet it remains a country that is so technoloigally advanced, that it can do wonders to mobilise its admittedly aging population and bring about great benefits, again increasing demand for shipping services.
There are also the two rival alliance net works to consider as well as the Beijing's Belt and Road scheme, each with its inherent assets and liabilities.
But before dealing with subsidiary aspects, India's explosive trade growth demands China's immediate attention. In the overall ranking of the Emerging Markets Index, India moved up one spot to second place, with China securing the number one slot. If growth predictions are correct, India could become a major hotspot for infrastructure investment and an engine for continued economic growth in the region.
As it stands, cargo through Indian ports is set to reach 1.75 billion tonnes in 2017, up 67 per cent from the 1.05 billion posted in 2015, notes Gary Cardenas, president of TOC Logistics International of Indianapolis, who was writing in Newark's Journal of Commerce.
According to the International Monetary Fund's April 2017 World Economic Outlook database update, India is the seventh largest economy in the world by nominal GDP and the third largest in terms of purchasing power parity.
India is also the 16th biggest maritime country in the world. And with 95 per cent of India's trading by volume coming by ship, the industry has always grown consistently, regardless of the ups and downs in other international markets.
Development of coastal regions is expected to increase India's merchandise exports by US$110 billion and increase its industrial competitiveness. The government is also looking to develop inland waterway sectors as an alternative to road and rail routes, transporting goods to the nation's ports and attracting more private investment in the region.
All this activity is attracting new services from major global container carriers. Hyundai Merchant Marine (HMM), CMA CGM, Shipping Corp of India, Korea Marine Transport Co and Pendulum Express Lines were to launch a joint loop between Asia and India dubbed the China West India Express (CWI) service. This new mini-alliance mirrors the mega alliances with an intra-Asia new loop with six 4,600-TEUers rotating through Xingang, Qingdao, Ningbo, Singapore, Port Klang, Nhava Sheva, Mundra, Hazira, Colombo, Port Klang, Singapore and back to Xingang.
Like India, Japan both rivals and co-operates with China, occasionally exchanging blow for blow as each works with and against each other in the creation of the trans-Eurasian rail routes, also called the New Silk Road, said Wade Shepard, author of Ghost Cities of China, in his Forbes magazine article.
"Just months after the announcement of a deal that would see China's Cosco Shipping and Lianyungang Port take a 49 per cent of Kazakhstan's epic Khorgos Gateway dry port on the Kazakh/China border, Japan's Nippon Express has signed with Kazakh Railways (KTZ) to increase the flow of container traffic between the Japan/South Korea and points along the way to Europe," said Mr Shepard.
But as yet there appears to be less investment that expected and Dubai's DP World that advises on 5,000-hectare special economic zone still faces an empty field outside the dry port, he said.
While this is a large undertaking, it is only part of what is a global competition to establish and dominate trade routes. "This move by Nippon Express and KTZ can be viewed as a continuation of China and Japan's efforts to vie for influence and investment throughout Eurasia and Africa," said Mr Shepard.
In unison, the US and Japan have rebuffed Beijing's invitation to join the China-initiated Asian Infrastructure Investment Bank (AIIB), despite the fact that many of its allies have jumped in and the need for the bank is very real.
In Indonesia, Japan's plan to construct a high-speed rail line from Jakarta to Bandung was usurped by China. In Bangladesh, Japan was given a contract to build a deep sea port on Matarbari island at the expense of a Chinese proposal to build a similar one nearby.
In Sri Lanka, Japan and India are considering a plan to build a port and industrial zone at Trincomalee in reaction to China's recent takeover of the Hambantota deep sea port.
Mere days after China's Belt and Road Forum in Beijing came to a close, India and Japan announced the Asia-Africa Growth Corridor (AAGC) - a very similar sounding initiative.
Japan's competitive yet relatively cordial regard for China's Belt and Road activity, has been subject to recent strains with fighter jets scrambling over disputed islands in the East China Sea. Such tensions have developed into a way of life for China and India where troops have actually engaged each other in Bengal, and the take over of Tibet have not been forgotten, nor have current attempts to put Nepal within China's sphere of influence.
In response India has reinforced its military presence on the Andaman and Nicobar Islands in the Bay of Bengal and developed closer relations with Vietnam, Japan and the United States, a development which had elevated the greatest concern to the Chinese.
Wary of China's One Belt One Road Initiative, India is focusing on building up its own resources to increase regional and international attractiveness and reliability as a major economic player -and it seems to be paying off.
It has reinforced its military presence on the Andaman and Nicobar Islands in the Bay of Bengal. Most importantly of all, India has developed even closer military relations with Vietnam, Japan and the United States. It is this last element in Indian policy which is of greatest concern to the Chinese.
Vietnam, though like China, a one-party communist state, has made common cause with Brunei and the Philippines against China takeover of sovereignty of the Spratley Islands on the direct trade route from between China and Europe. India has also sought to strengthen relations with the Maldives, the Seychelles and Mauritius and restore its position of influence in Sri Lanka and Nepal.
The rivalry is far from a hot war, despite skirmishing and near skirmishing here and there. Nor could it be called a cold war, as it is too cordial for that.
Rather it is a cool war, among business partners who do not entirely trust each other, resulting in contingency alliances with one another with each attempting to have it their way.
Yet a simple review of the situation, such as one above, it is not hard to see the opportunities that it presents to world shipping to and from Asia in general, but China in particular. |
