China’s stimulus package is good news for shipping, but a widening rift between Washington and Beijing is a bigger threat lurking in the background, two Greek owners told the Marine Money conference in Athens on Tuesday.
Aristides Pittas, principal of US-listed bulker and container ship outfits EuroDry and Euroseas, told a crowd of about 300 at the Eugenides Foundation: “The biggest risk that shipping can face is deglobalisation.”
A cold war between China and the US could untangle international trade flows to the benefit of domestic ones and therefore harm shipping, Pittas added.
His statements are in line with those of other major shipping players such as International Chamber of Shipping chairman Emanuele Grimaldi, who has repeatedly warned of the adverse effect of protectionism and trade wars between the West and China.
Economic warfare with China may sharpen in the case of a new Donald Trump presidency after the US elections in November, as he has adopted harsh language towards China.
Potential conflict between China and Taiwan could be the trigger.
George Souravlas, founder and chief executive of private Greek bulker owner Load Line Marine, said on the same panel: “We’re pretty concerned how this is going to develop over the years.”
A war between China and Taiwan would be an “atom bomb” on global geopolitics, he added.
Pittas nevertheless declared himself “cautiously optimistic” that trade wars will not spin out of control.
“I believe the economy is what drives the world and it’s definitely of economic advantage for the whole planet to interact with each other,” he told the audience.
Hail to the stimulus
Conflict resolution, however, can cause headaches too. According to Jerry Kalogiratos, chief executive of Capital Clean Energy Carriers, some corners of the market might feel a pinch if current conflicts are resolved quickly and unexpectedly.
“An abrupt unwinding of certain geopolitical factors in play, such as the closing of the Suez Canal, the Russia-Ukraine conflict … would probably lead in the short term to less demand for certain segments,” Kalogiratos said.
Not everything at the panel was doom and gloom. Panellists pointed to positive news coming out of China and the US.
Souravlas welcomed a fresh package of economic measures to stimulate China’s giant economy.
“I think this is going to be some positive news for our industry — especially for the dry bulk sector,” he said.
Souravlas also saw upside in the loosening of monetary policy in the US.
“The Federal Reserve will continue decreasing interest rates,” he said.
“This is a two-way gain for us because it reduces our bottom line and enhances trade and consumer spending.”
