CMA CGM, the world’s third-largest container shipping group, is looking at placing $2 billion worth of orders to shipyards in China, where bank loans are more available, while European banks tighten lending, Beijing-backed Ta Kung Pao reported on Friday.

The French shipping firm was in talks with China’s top two ship builders, State Shipbuilding Corp (CSSC) and China Shipbuilding Industry Corp (CSIC), for a total of 20 container ships of 9,000 to 10,000 twenty-feet equivalent units (TEUs) each, the paper quoted industry sources as saying.

The Export-Import Bank of China was considering providing the French company with comprehensive financing, it said.

Both CMA CGM and Export-Import Bank were not immediately available for comment.

China’s national policy is to support the export of electrical and machinery goods, including products from its shipping industry that is vying with South Korea to be the world’s largest shipmaker.

“It would be difficult to see big shipping orders these days, if there is no supportive financing,” said Geoffrey Cheng, head of transportation and industrial research of BOCOM International.

Global shipping firms have been battered by a supply glut and high fuel costs while consumer confidence is weak on fears of a recession in the United States and some European countries.

The European debt crisis has seen many banks shutting their doors to the highly cyclical shipping industry, which has been suffering from sliding freight rates.

“European banks are not lending anymore,” Cheng said.

KOREAN SHIPBUILDERS SAY NO

Credit ratings agency Moody’s cut CMA CGM’s rating to B1 from Ba3 last month after the container ship operator reported a plunge in first-half profit.

Rival ratings firm Standard & Poor’s revised CMA CGM’s outlook to negative from stable.

Korean shipbuilders declined to arrange financing for new ships so CMA CGM turned to Chinese shipyards, the paper quoted a market source as saying.

A combination of aggressive pricing and financing from state-run Chinese banks would help fill up the order books of Chinese shipbuilders, said Robert Bruce, an analyst at CLSA Ltd.

Brazilian mining giant Vale last year secured $1.23 billion of ship financing from the Export-Import Bank of China and Bank of China , representing some 80 percent of the value of 12 very large ore carriers it ordered at China’s Rongsheng Heavy Industries .

Bruce said prices of Chinese container ships are usually 15-20 percent lower than those made in South Korea.

CSSC, the parent of Shanghai-listed China State Shipbuilding Co Ltd , is China’s biggest shipbuilder followed by CSIC, which controls China Shipbuilding Industry Co Ltd .

CMA CGM plans to order five ships first with options for another 15, and the ships are expected to be built in Shanghai and Dalian and delivered from 2013, Ta Kung Pao said.