China’s Economic Interests at Risk With Rise of Houthi Shipping Attacks

Chinese container ship off the coast of Los Angeles, California.


China is the customer for 90% of the oil exported by Iran. The chances of the Houthis firing on ships of a state-owned Chinese company are therefore very low, raising questions about the reasons for COSCO’s decision”


The Israel-Hamas conflict and the conflict’s subsequent spread to Yemen and the Red Sea is challenging Chinese economic interests and policy in the region. In early January, Chinese shipping giant China Ocean Shipping Company (COSCO) and Hong Kong–based subsidiary Overseas Orient Container Line announced that they would cut service to Israeli ports in response to Houthi attacks on ships destined for Israel. According to the first excerpted articles from the Israeli business news publication Globes, China has in effect sacrificed trade with Israel to maintain shipping access to the Red Sea. While the article vilifies the Chinese position, China is in a bind because both Israel and Iran are significant regional trading partners with China. The Houthis are militarily and diplomatically supported by Iran. China must balance its priorities in the region between Iran and Israel—and any regional war would be bad for China’s Middle East interests.[i] In the second excerpt, taken from a speech delivered by China’s UN Ambassador less than a week after the COSCO announcement, the Ambassador noted that “the waters of the Red Sea are an important transportation channel for goods and energy” and called on the Houthis to “to immediately stop harassing merchant ships and respect the navigation rights of merchant ships from all countries in the Red Sea waters, in accordance with international law.”[ii] Not long after, a Houthi official interviewed by Russian news source Izvestia stated that all Russian and Chinese ships would be safe navigating the Red Sea but that ships aligned with Israel would be subject to targeting. The Houthi spokesman continued “Our goal is to raise the economic costs for the Jewish state to stop the carnage in Gaza.” However, despite these assurances, any economic pain that Israel might feel because of reduced shipping to its ports also transfers to China, complicating its economic strategy in the Middle East.


Sources:

“Chinese shipping giant COSCO to stop visiting Israeli ports,” Globes (Israeli business news), 7 January 2024. https://en.globes.co.il/en/article-chinese-shipping-giant-cosco-to-stop-visiting-israeli-ports-1001467115

Chinese state-owned shipping giant COSCO Shipping has stopped visiting Israeli ports, “Globes” has learned. The company, the fourth largest container shipping line in the world, with about 11% of world trade, decided on this step even though it is not much threatened in the Red Sea, because of the very fact that it is Chinese, and because of China’s ties with Iran, the patron of the Houthi rebels in Yemen.

Besides the effect on trade between the Far East and Israel, COSCO’s decision is significant because it cooperates with Israeli shipping line ZIM, which will have to operate more ships on the Far East routes, which is liable to will lead to higher shipping costs, since XIM will be short of ships.

The second direct effect will be on the Haifa Bayport, which is operated by another state-owned Chinese company, SIPG. The port is dependent on the many COSCO ships that visit it.

The Houthis are threatening to attack vessels of any company that sails to Israel, but China is the customer for 90% of the oil exported by Iran. The chances of the Houthis firing on ships of a state-owned Chinese company are therefore very low, raising questions about the reasons for COSCO’s decision, of which international shippers have yet to be notified.

A pointer to COSCO’s step was the recent announcement by its Hong Kong-based subsidiary OOCL that it was ceasing to sail to Israel because of “operational problems”. That announcement, intended to enable it to sail in the Red Sea without interference by the Houthis, led to wide criticism. In the end, the company caved in, like Singapore-based shipping line ONE (Ocean Network Express).


“常驻联合国代表张军大使在安理会红海局势紧急公开会上的发言 (Speech by Ambassador Zhang Jun, Permanent Representative to the United Nations, at the Security Council’s emergency public meeting on the Red Sea situation),” PRC Permanent Mission to the United Nations, published by Ministry of Foreign Affairs People’s Republic of China, 12 January 2024. https://www.mfa.gov.cn/web/zwbd_673032/wjzs/202401/t20240114_11223386.shtml

Mr. President: China thanks Russia for its initiative to hold this emergency meeting and thanks Assistant Secretary-General Kyali for his briefing. The United States, Britain and other countries have carried out air strikes on targets in Yemen, further escalating tensions in the Red Sea region. China expresses serious concern about this.

The waters of the Red Sea are an important transportation channel for goods and energy. For some time, the Houthi armed forces have repeatedly attacked and seized merchant ships in the Red Sea waters, disrupting international trade order and not conducive to regional stability. China has repeatedly called on the Houthis to immediately stop harassing merchant ships and respect the navigation rights of merchant ships from all countries in the Red Sea waters in accordance with international law. China also calls on all parties, especially influential major powers, to play a constructive and responsible role in jointly safeguarding the safety of waterways in the Red Sea.

We regret to see that the brazen military actions taken by relevant countries against Yemen not only caused infrastructure damage and civilian casualties, but also aggravated security risks in the Red Sea waters and did not help protect the safety of commercial ships and freedom of navigation. Relevant military actions may also impact the political process in Yemen. We fail to see how such a military operation could achieve the stated intended objectives.

It must be noted that the Security Council has never authorized any country to use of force against Yemen. The military actions taken by relevant countries run counter to the purpose of Resolution 2722 just adopted by the Security Council. China reiterates that no country shall misinterpret or abuse international law and Security Council resolutions to create new tensions in the Red Sea waters.

Mr. President: The current tensions in the Red Sea are one manifestation of the spillover effects of the conflict in Gaza. Letting the conflict in Gaza prolong while hoping that the conflict will not expand may be wishful thinking. It is even more contradictory and irresponsible to advocate preventing conflicts from spilling over, while at the same time adding fuel to the fire and provoking military confrontation. The Middle East is already on the brink of extreme danger. What we should avoid most at the moment is reckless military adventurism. What we need most is calmness and restraint to prevent further expansion of conflicts. We urge all relevant parties, especially the influential powers, to abide by the UN Charter and international law, adhere to the correct direction of dialogue and consultation, and make practical efforts to maintain peace and stability in the Red Sea and the Middle East. Thank you, Chairman.


В «Ансар Аллах» гарантировали безопасность судам РФ и КНР в Красном море (Ansar Allah guaranteed the safety of Russian and Chinese vessels in the Red Sea),” Izvestia (Russian news source), 19 January 2024. В «Ансар Аллах» гарантировали безопасность судам РФ и КНР в Красном море | Новости мира | Известия | 19.01.2024 (iz.ru)

Representative of the al-Buheiti movement: the Houthis will not attack Russian and Chinese ships

The Yemeni Houthi movement Ansar Allah is attacking US and British ships in the Red Sea; as for other countries, including Russia and China, their shipping in the region is guaranteed safety. A member of the Ansar Allah Politburo, Muhammad al-Buheiti, stated this on January 19 in an interview with Izvestia.

“As for all other countries, including Russia and China, their shipping in the region is not threatened. Moreover, we are ready to ensure the safety of the passage of their ships in the Red Sea, because free navigation plays a significant role for our country,” Al-Buheiti noted.

The politician also added that any Israeli ships or those connected with Israel will not have the slightest opportunity to sail through the Red Sea – attacks on them will continue.

“Ansar Allah does not pursue the goal of capturing or sinking this or that sea vessel. Our goal is to raise the economic costs for the Jewish state to stop the carnage in Gaza. If the crews of the ships that came under our fire had not ignored our warning signals and changed their direction, the further escalation that the American side caused in the interests of protecting Israel could have been avoided,” he said.

Earlier, on January 17, the military representative of the Ansar Allah movement, Yahya Saria, said that it launched a missile attack on the American ship Genco Picardy in the Gulf of Aden. According to him, the Houthis recorded a direct hit on the ship.

On the same day, the UK Navy’s Maritime Trade Coordination Center (UKMTO) reported that a drone attacked a ship off the coast of Aden, Yemen, which led to a fire on board the ship. A previous attack on a ship in the Red Sea was reported the day before. The Houthis then took responsibility for it and confirmed the fact of a missile attack on the bulk carrier Zografia, which was flying the Maltese flag.The Houthis began attacking shipping in the Red Sea and Gulf of Aden from November 2023 to protest Israeli actions in the Gaza Strip…


Notes:

[i] For a previous perspective on the conflict in Gaza’s impact on China interests in the region see: “Israel’s close economic ties with China worked well – until the Gaza conflict,” South China Morning Post, 2 November 2023. https://www.scmp.com/news/china/diplomacy/article/3240061/israels-close-economic-relationship-china-worked-well-until-gaza-conflict-revealed-its-limits

[ii] A wide range of global reporting has indicated that China is also said to have put pressure on Iran to rein in the Houthis, while the United States has asked China to take more of a role in mediating the conflict in Israel.


Image Information:

Image: Chinese container ship off the coast of Los Angeles, California.
Source: Corey Seeman
Attribution: CC By-NC-SA 2.0


Iran Installs New Precision Missiles on Army Helicopters

A Shafagh missile mounted on an Iranian Bell-114 helicopter.

A Shafagh missile mounted on an Iranian Bell-114 helicopter.


“The missile… is capable of destroying multiple ground targets in all weather conditions.”


Almost five years to the day after the Iranian Army unveiled a prototype short-ranged, “Shafagh” air-to-ground missile, Iranian Army Ground Force Commander Brig Gen. Kioumars Heydari announced that the Army has now equipped its aviation wing with a new generation Shafagh. In the accompanying article from Mashregh News,a source close to Iran’s intelligence and security apparatus, Heydari described the short-range missile as utilitarian, capable of mounting on manned and unmanned fixed-wing aircraft as well as helicopters, and able to find targets in all weather and times of day. The description of the Shafagh offered in the Iranian press suggests the missile is the Iranian equivalent of an AGM-114 Hellfire, though Iranian officials claim a slightly larger warhead and greater range. Even if Iranian figures exaggerate their claims regarding the Shafagh’s capabilities, an increased precision to drone-launched missiles could complicate regional operations for the United States, its Arab allies, and Israel.[i]

While Iran has recently modernized its helicopter fleet, Heydari’s emphasis on helicopter operations is curious, given both the vulnerability of helicopters to longer-range missiles and the lack of obvious use in the regional environment.[ii] If the Iranian military wanted to attack shipping in the Persian Gulf, for example, utilizing anti-ship missiles or drones would prove far less risky. Iran’s preference for proxy warfare to maintain plausible deniability and to avoid direct confrontation with superior military powers makes the use of helicopters to support operations unlikely. Heydari’s unveiling of the Shafagh, therefore, may have more to do with Iran’s ambitions to be a military export power. Iranian commanders say that Iran’s indigenous military industry “stands among the world’s top states” regarding both drones and high-precision missiles. While Iran now reportedly exports drones to Russia among other states, a proliferation of Hellfire-like missiles to regional proxies in Syria, Iraq, Lebanon, and Yemen—all of which already utilize Iranian drones—might augment the lethality of these groups. So too would the export of helicopters to Iran’s regional allies like Syria or Yemen’s Houthi-led government. Given the frequency of drone and missile strikes across the region, any increase in precision will reduce the diplomatic space to refrain from military retaliation in response to attacks perpetrated by proxies or militias. After all, it is more politically feasible to wave off retaliation for a strike that misses rather than one that strikes key infrastructure or kills multiple soldiers or officials.


Source:

“Nasib-e Nasal-e Jadid Mushakha-ye ‘Shafagh’ Ruye Balgaradaha-ye Havaniruz- Artesh (Installation of a New Generation of Shafagh Missiles on Army Helicopters),” Mashregh News (news source close to Iran’s intelligence and security apparatus), 9 April 2023. https://www.mashreghnews.ir/news/1360280

The new generation of “Shafagh” [Twilight] missiles that have special operational capabilities, compared to previous models were installed on Army Aviation’s Cobra and [Bell-] 214 helicopters. The missile, which is 1.9 meters long and weighs about 50 kilograms, is capable of destroying multiple ground targets in all weather conditions, and is also useful for night operations. The new model also has a range of 20 kilometers, a significant increase compared to previous generations. The new Shafagh missiles can be installed on all types of helicopters, drones, and fighters. They have laser guidance, travel at a speed of 750 meters per second [1678 mph] and can destroy both moving and stationary targets within a radius of 15-20 kilometers. They are precise to a margin of 0.20 meters.

The two-stage missile, using a 13-kilogram warhead, has significant penetration power and can destroy all types of armored systems. It can destroy, for example, tanks, personnel carriers, concrete trenches, floats, and other defense infrastructure.

The prototype Shafaghs are actually based upon the Shahab-e Saqeb defense missile that uses an infrared imaging seeker. This technology has the ability to track armored and floating targets from all angles, has a relatively high resistance to jamming and deception, and has much better sensitivity in detecting targets.One of the advantages of this missile, which is similar to a Hellfire missile, is the ease of deployment and the need not to have to stabilize the helicopter in front of a target. Rather, the Shafagh is in the category of ‘shoot-and-forget’ missiles.


Notes:

[i] This is not the first time Iran has claimed enhanced missile precision. See: Michael Rubin, “Iran Claims Enhanced Missile Precision” OE Watch, May 2017. https://community.apan.org/wg/tradoc-g2/fmso/m/oe-watch-past-issues/195361/download

[ii] Michael Rubin, “Iran: Reconstruction and Overhaul of Helicopters” OE Watch, March 2021. https://community.apan.org/wg/tradoc-g2/fmso/m/oe-watch-past-issues/368233/download


Image Information:

Image: A Shafagh missile mounted on an Iranian Bell-114 helicopter.
Source: https://cdn.mashreghnews.ir/d/2022/04/09/4/3446518.jpg
Attribution: Mashregh News