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China Should Actively Respond To Red Sea Disruption

MNI (Singapore)

Authorities should prepare for stress testing and risk investigation following a sharp increase in freight rates as more shipping firms pause Red Sea journeys over attacks, said in an editorial. If the Far East-Northwest Europe and Far East-Mediterranean routes are forced to detour around the Cape of Good Hope, the shipping distance will increase by 29.1% and 80%, with the sailing time lengthened by 10 and 19 days. ASEAN, the Middle East, Africa, and Europe account for an increasing share of China's exports, alongside a rising proportion of trade financing in yuan. Higher freight will inevitably magnify the risk of RMB trade financing. This has also pushed up international crude oil and natural gas prices, which could lead to a rebound in U.S. and Europe inflation and delay expected rate cuts.

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