Agencies
Exports of Chinese cranes are flooding into some Latin American countries, suggesting active expansion in construction activities under Beijing’s Belt and Road Initiative and paving the way for diversification amid the looming trade war with the United States, analysts said.Crane exports to Peru rose by nearly 132 per cent year on year in October, according to Chinese customs data, while total shipments of the machinery – which can be used to load and unload container ships – increased by nearly 76 per cent in the first 10 months of the year to US$143 million.
In May, China’s crane exports to Peru went up from less than US$100,000 a year earlier to over US$54 million, just as the Biden administration announced a punitive tariff of 25 per cent on imports of Chinese ship-to-shore cranes into the US.
"It is more likely that these cranes are for port construction,” said Liang Yan, an economist at Willamette University in the US state of Oregon."It is unlikely that US importers foresaw the tariff and ordered the cranes ahead of time to be delivered this year.” Washington has alleged Chinese port cranes have been equipped with surveillance systems, with the new duties taking effect on September 27.China’s crane exports to Mexico have also grown rapidly, rising by 193 per cent year on year for the January to October period. In August, exports surged by 1,202 per cent."The increase in cranes is likely to suggest that China is expanding port capacity in these countries to export from Latin America to the US,” said Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at French investment bank Natixis in Hong Kong.
"China will do mostly transshipping, which means they could change the labelling and it will be difficult for the US to identify some of their sources.” Beijing is actively expanding its influence in Latin America’s ports, opening the Chancay container megaport in Peru during a visit by President Xi Jinping earlier this month.
The port is set to shorten shipment times between Shanghai and Peru by between 10 and 12 days to about 23 days and lower logistics costs by at least 20 per cent.China’s state-owned Shanghai Zhenhua Heavy Industries dominates the global market for ship-to-shore cranes, with a staggering 70 per cent market share.According to a US congressional report from September, the company manufactures 80 per cent of the ship-to-shore cranes used in US ports, including 10 strategic seaports.
Shanghai Zhenhua, which has been active in projects under China’s Belt and Road Initiative – a broad strategy to enhance regional connectivity through infrastructure – has delivered 18 cranes to Panama over the past three months, according to Seatrade Maritime News.
In Panama, home to the famed canal that plays host to about 5 per cent of global seaborne trade, China’s crane exports skyrocketed by 1,150 per cent year on year in the first 10 months of 2024, including a 5,497 per cent increase in June.
The surge in port construction across Latin America has driven a 47 per cent year on year increase in China’s crane exports to the region during the first 10 months of the year, according to Chinese customs data. This is more than double the growth rate of its overall exports.
However, Garcia-Herrero pointed out potential risks for China-invested or constructed ports like Chancay, suggesting that US president-elect Donald Trump could ban products originating from the ports as a means to prevent Chinese goods from entering the US market.Last month, China’s crane exports to the US dropped by nearly 66 per cent year on year.
The reduction may be exacerbated further by Trump, who on Monday said that he would impose a 25 per cent tariff on imports from Mexico – a popular destination for Chinese exporters seeking to bypass duties on direct shipments – using an executive order on the first day of his new administration, which is set to start on January 20.Reports by the Centre for Strategic and International Studies revealed that China has invested in port projects in 16 of the top 20 countries or territories for shipping connectivity.
The Washington-based think tank said more than 27 per cent of global container trade last year passed through terminals where firms based in mainland China and Hong Kong held direct stakes.
Hong Kong-based Hutchison Port Holdings operates seven ports in Latin America and the Caribbean, CSIS said; four in Mexico, two in Panama and one in the Bahamas.