China’s State Council Unveils Three-Year Restructuring Plan

China’s State Council has revealed a three-year plan to upgrade and restructure its troubled shipbuilding industry through 2015, a move to further stabilize economic growth through reform.

According to the official press agency of the People’s Republic of China Xinhua, the plan calls for companies to improve their manufacturing capacity of equipment and materials, as well as enhance their management and services. The plan also envisages for the industry’s structure and productivity to be optimized, through more mergers and restructuring.

“Restructuring and technology upgrading will be the focus of the shipbuilding industry in the next few years, to control the oversupply of low-end ships and boost technology competence in producing high-end ships,” said Nie Lijuan, deputy secretary-general of China Association of the National Shipbuilding Industry (CANSI).

What is more, the Chinese government’s plan is also inciting financial institutions to provide more credit financing to support enterprises as they target foreign markets.

Data from the Ministry of Industry and Information Technology showed that only 20.6 million deadweight tonnage (DWT) in orders were completed from January to June nationwide, down 36 percent year-on-year. Also, Chinese shipbuilders’ orders in hand dropped 13.4 percent to 108.98 million DWT as of the end of June.

The core business revenue of 80 major shipbuilding companies declined 22.4 percent to 84.1 billion yuan from January to May.

Despite the plan and all efforts being made by the govt to solve the problem, one thing is for sure, the total recovery of China’s shipbuilding industry will be slow and painstaking.

[mappress]
Shipbuilding Tribune Staff, August 5, 2013