Fresh trade crisis threatens after new Chinese virus outbreak

Australian exporters and importers will be closely watching the fallout from a new COVID-19 outbreak in southern China that is creating a trade bottleneck.

China has largely stamped out cases of local COVID-19 transmission, but Guangdong province has seen a flare-up of the more infectious Delta variant of the virus, initially discovered in India.

The Chinese province is a major shipping hub and home to the ports of Guangzhou and Shenzhen – the third largest and the fifth largest in the world by container volume, according to the World Shipping Council.

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The southern Chinese province and shipping hub of Guangdong has been hit by a new virus outbreak creating a trade bottleneck. (Getty)

Since the variant was found in Guangzhou last month, it has grown to 100 cases.

Authorities have reacted by imposing lockdowns and other measures that limit the operations of ports and transport industries.

Trade expert Roland Rajah told Australian exporters and importers will be monitoring events closely.

“It’s too early to predict the full effect of this but southern China is an important shipping hub for Australia,” Dr Rajah, of the Lowy Institute said.

“It is disrupting China’s economy itself and the risk is it gets worse.”

Dr Rajah said southern China is a gateway for billions of dollars worth of Australian exports such as iron ore and imports like Chinese electronic goods.

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The stranded container ship MV Ever Green became stuck in the Suez Canal in March and disrupted global trade. (AP)

The latest disruption to world trade comes just weeks after a giant container ship blocked the vital Suez Canal passage.

When the giant container ship the MV Ever Given wedged itself across the Suez Canal in March it made world headlines and cost global companies billions of dollars in redirecting shipments.