China, home of the world’s biggest shipbuilding market, has revealed a three-year plan to restructure its shipbuilding industry in order to help end a prolonged slump.
The 2013-2015
strategy, which was publicly unveiled by the Chinese State Council August 4,
outlines multiple areas of focus to raise the efficiency of the sector and
position it as a global competitive industry.
One of the
plan’s components is disallowing financial institutions to lend to companies
embarking on new shipbuilding facilities. Among the other components are: the
advancement of technology in the shipbuilding sector, an expansion into
offshore shipbuilding and equipment construction, controls on adding new yard
capacity, faster phasing out of old vessels and the capturing of a larger
global market share.
The capacity
controls involve local authorities and governments strictly controlling new
capacity by halting approvals of new shipbuilding facilities as well as
stopping projects that had proceeded without first securing the necessary
permits.
China had
previously said it plans to force consolidation in a number of industries
struggling with sluggish demand and severe overcapacity to rebalance the
economy. As part of the consolidation, the government wants aging ships
dismantled and shipbuilders to build high-end offshore engineering products,
which it expects will have higher market demand.
Although the
country’s shipbuilding sector is the world’s largest, since the most recent
global recession, it has suffered from overcapacity, a shortage of new orders,
price declines for building ships and a slump in the freight market.
Under its new
three-year plan, the government says, Chinese shipbuilders should aim to secure
25 percent of the global market share for high-tech ships and one-fifth for the
global offshore engineering product market by 2015.
