UNCTAD: China Ranked as Best Connected to Other Countries by Sea

Chinese flagIllustration; Source: Pixabay under CC0 Creative Commons license

China has retained its lead as the country best connected to others by sea, according to the liner shipping connectivity index (LSCI) from United Nations Conference on Trade and Development (UNCTAD).

The index for 2019, that shows which countries improved or worsened their positions in maritime transport networks, pointed that China’s LSCI has increased by 51% since 2006.

“A country’s position in the global container shipping network – its connectivity – is an important determinant of its trade costs and competitiveness,” Jan Hoffmann, UNCTAD’s chief of trade logistics, said.

Five of the top 10 best connected economies in 2019 are in Asia, with Singapore, Korea, Hong Kong (China), and Malaysia rounding out the top-five list, each with a score of more than 100, according to the index’s metrics.

At the other end of the table, small islands developing states (SIDS) have hardly seen any improvement, meaning trade in shipped goods remains problematic in those countries, with knock-on economic effects.

Source: UNCTAD, based on data provided by MDS Transmodal

“We observe a ‘connectivity divide’ – a growing difference – between the best and worst connected countries,” Hoffmann added.

The LSCI, which is calculated from data on the world’s container ship deployment and released annually, covers 178 countries and shows maritime connectivity trends from 2006 to 2019.

Additionally, UNCTAD said that the 2019 shipping connectivity index has expanded country coverage and added a new component on countries that can be reached without transhipment.

“Counting on a direct regular shipping connection has empirically been shown to help reduce trade costs and increase trade volumes,” Hoffmann noted.

Research shows that the absence of a direct connection is associated with a 42% lower value of bilateral exports, according to UNCTAD.

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Posted on July 18, 2019 with tags .

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