China urges shipbuilders to look for acquisitions abroad

China urges shipbuilders to look for acquisitions abroad

BEIJING's recent moves to tighten capital outflow to curb overseas investments by Chinese firms appear not to apply to the nations's shipyards.

18 January 2017 - 12:00 - Update: 19 January 2017 - 08:29

With weak oil prices and freight rates that have led to declining orders for offshore rigs and vessels worldwide, China wants its shipyards to look actively for acquisitions overseas.

The government is encouraging shipyards to develop and build more offshore equipment, according to a plan for the five years through 2020 posted on the website of China's Ministry of Industry and Information Technology, Hellenic Shipping News reported.

The maritime proposals under the plan add to previously announced measures for the industry that have included selecting 51 yards deemed worthy of policy aid and promoting a move into building offshore rigs.

The steps are part of a broader cross-industry drive by the Chinese government to combine some companies in sectors including shipping and aviation and adopt other measures to bolster their competitiveness especially among overseas rivals.

"China's shipbuilding industry is facing unprecedented challenges since the global financial crises," the ministry said in the plan.

"But it's been also presented with historic opportunities to overtake others amid pressing and challenging needs to adjust and upgrade industry structure."

Under China's latest plan, the government aims to maintain a "white list" of shipyards to whom it will direct more resources, while pushing smaller and weaker ones into restructuring and bankruptcy to slash shipbuilding overcapacity.

The government targets having its top 10 shipyards build more than 70 per cent of the nation's vessels by 2020 under the proposal.

The 10 leading shipbuilders on the mainland accounted for 53 per cent of total orders completed and 71 per cent of new orders received in 2015, according to previously announced figures.




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