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Shipping Issues Having A Big Effect on Products Made in China

Trade tensions and a global pandemic have contributed to the disruption of international shipping for Chinese companies.

Fang Xueyu, vice president of international marketing for Asia-Pacific at the Qingdong-based appliance company, Hisense, said to CNBC that the company just can’t ship many of their products.

Xueyu told CNBC in an interview in July that the price of shipping containers has grown from $3,000 to $15,000 each and also take roughly one week longer to arrive at their destination.

In June, a sharp rise in Covid cases in one of China’s major export hubs further aggravated the matters, and a new EU tax policy on imported goods could potentially spell higher costs for Chinese merchants selling in Europe.

As China’s logistical problems continue to mount, the demand for products made in China is as strong as ever. According to official customs data, Chinese exports to the European Union have rocketed during the pandemic, growing 35.9% over the past year to $233 billion, and exports to the United States rose 42.6% to $252.86 billion.

Many Chinese businesses selling abroad have also run afoul of Amazon’s fake review policy, resulting in restrictions or outright bans of these companies from the online commerce platform. In a press briefing earlier this month, Li Xinggan, director of the foreign trade department at China’s Ministry of Commerce, acknowledged the issue: ““We understand that some sellers’ behavior has been deemed in violation of Amazon’s ‘Seller Code of Conduct’ and other terms, (causing) restrictions on operations. We have always required businesses to abide by each country’s laws and regulations, to respect local customs and habits, and develop operations in accordance with law.

To mitigate the shipping issues, e-commerce companies in China have begun directing more resources towards the acquisition and construction of storage in their foreign markets. According to the Ministry of Commerce, Chinese companies constructed around 100 new overseas warehouse in 2020 and a further 100 in the first half of 2021.

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