Hong Kong - Ships in Chinese waters are disappearing from industry tracking systems, creating yet another headache for the global supply chain. China's growing isolation from the rest of the world — along with a deepening mistrust of foreign influence — may be to blame.
Analysts
say they started noticing the drop-off in shipping traffic toward the end of
October, as China prepared to enact legislation governing data privacy.
Usually,
shipping data companies are able to track ships worldwide because they are
fitted with an Automatic Identification System, or AIS, transceiver.
This
system allows ships to send information — such as position, speed, course and
name — to stations that are based along coastlines using high-frequency radio.
If a ship is out of range of those stations, the information can be exchanged
via satellite.
But
that's not happening in the world's second-largest economy, a critical player
in global trade. In the past three weeks, the number of vessels sending signals
from the country has plunged by nearly 90%, according to data from the global
shipping data provider VesselsValue.
"We
are currently seeing an industry wide reduction in terrestrial AIS signals in China,"
said Charlotte Cook, head trade analyst at VesselsValue.
New data
law could worsen supply chain chaos
Asked
about the issue, China's Ministry of Foreign Affairs declined to comment. The
State Council Information Office, which acts as a press office for the
country's cabinet, did not immediately respond to a request for comment about
why shipping providers were losing access to data.
But
analysts think they've found the culprit: China's Personal Information
Protection Law, which took effect November 1. It requires companies that
process data to receive approval from the Chinese government before they can
let personal information 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
doesn't mention shipping data. But Chinese data providers might be withholding
information as a precaution, according to Anastassis Touros, AIS network team
leader at Marine Traffic, a major ship-tracking information provider.
"Whenever
you have a new law, we have a time period where everyone needs to check out if
things are okay, " Touros said.
Other
industry experts have more clues of the law's influence. Cook said that
colleagues in China told her that some AIS transponders were removed from
stations based along Chinese coastlines at the start of the month, at the
instruction of national security authorities. The only systems allowed to
remain needed to be installed by "qualified parties."
Not all
of the data is gone: Satellites can still be used to capture signals from
ships. But Touros said that when a ship is close to shore, the information
collected in space is not as good as what can be gathered on the ground.
"We
need terrestrial stations in order to have a better picture, a more
high-quality picture," he added.
With
Christmas approaching, a loss of information from mainland China — home to six
of the world's 10 busiest container ports — could create more problems for an
already troubled global shipping industry. Supply chains have been under strain
this year as badly congested ports struggle to keep up with a rapidly
rebounding demand for goods.
Shipping
firms rely on AIS data to predict vessel movement, track seasonal trends and
improve port efficiency, according to Cook from VesselsValue. She said the lack
of Chinese data "could significantly impact ocean supply chain visibility
across China." The country is one of the world's major importers of coal
and iron ore, as well as a huge exporter of containers.
"As
we move into the Christmas period, it will have a really big impact on [supply
chains] and this is the most important element right now," said Georgios
Hatzimanolis, media strategist for Marine Traffic. He expects the loss of
"minute by minute" ship data from China to have "a great impact
on the supply chain," since companies may lose crucial information about
ship docking, unloading and leaving times.
The
global supply chain is already under "great stress," he added.
"It doesn't need another factor to make it more difficult."
China's
self-isolation
China's
desire to retain absolute control over all data and information within its
borders isn't surprising, as President Xi Jinping continues to reassert the
ruling Communist Party's dominance in every aspect of the economy and society.
The
country has been pushing for economic self-sufficiency as it faces 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 tech war with former US President Donald Trump. That's the point, for
example, of "Made in China 2025," an ambitious plan to push China's
manufacturing sector into more advanced technological fields.
Some top
officials in Beijing have recently tried to quell concerns among global
investors that the country is isolating itself from the rest of the world as it
prioritizes 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 isolated from
the world." Speaking via video, he also called on countries to keep supply
chains "stable and smooth."
But
China has embraced policies during the coronavirus pandemic that often appear
to do otherwise.
For
example, during the pandemic Xi has doubled down on his push for self-reliance,
stressing the need to create "independent and controllable" supply
chains to ensure national security.
And the
country's sweeping clampdown on tech extended this summer to foreign IPOs, when
the Cyberspace Administration of China proposed that major companies with more
than a million customers seek approval before listing shares overseas. 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.
China's
actions this year may come at a cost, though, if the country goes too far in
its attempt to protect itself from perceived foreign interference.
-- CNN's
Beijing bureau contributed to this report.
https://edition.cnn.com/2021/11/24/business/china-shipping-data-mic-intl-hnk/index.html