China will support the shipbuilding industry
China issued a three-year plan to urge financial institutions to support the shipbuilding industry in trouble, the biggest one month after the world's largest private garden in the nation sought financial support from the government.
Shipowners who place orders for China-made ships, engines and axles must get better funding and some key enterprises will be allowed to issue corporate bonds, the State Council said in a statement released yesterday . Chinese manufacturers do not have a strong innovation, while overcapacity persists, the statement dated July 31 said.
China may have a third of its more than 1,600 meters Stop in about five years, according to Wang Jinlian, president of the industry association. The sector is among those iron and steel, cement, electrolytic aluminum and plate glass must accelerate the gradual elimination of overcapacity, according to the Ministry of Industry and Information Technology.
"It seems that the government wants to appease the publishing sector support plan because it can not afford to see social unrest caused by failures or large-scale job losses," said Lawrence Li, a Shanghai-based analyst at UOB-Kay Hian Holdings Ltd. "However, the government did not explicitly say how it would help manufacturers and what kind of projects are key."
China Rongsheng Heavy Industries
China Rongsheng Heavy Industries Group Holdings Ltd. (1101), the largest shipbuilder outside state control by the backlog, reported last month, it posted a net loss in the first half and said that it sought financial support from the government and shareholders after a dip in orders strained cash flows. The company has also agreed to issue convertible bonds to raise a net 1.38 billion Hong Kong dollars ($ 178 million) for working capital and to support the development of its offshore engineering business.
Rongsheng Shares jumped as much as 2.1 percent today, and he was traded up 1 percent to 97 Hong Kong cents from 9:32
The plan of the State Council also called on local governments to support innovation shipbuilders, strictly control new building, promotion of high-end products and stabilize international market share in the industry with more funding importantly, the statement said.
Companies need to be convinced that
"the potential of the internal market remains relatively high," the statement said. Besides limiting new shipbuilding capacity, the government is encouraging mergers and acquisitions and the pooling of resources in the industry, the statement said.
Thirty-eight percent of sites in China has not been awarded contracts for new ships last year, and 10 percent had no deliveries scheduled beyond the end of this year, the naval unit Brokerage based in London, ICAP Plc said in a report sent by e-mail on December 24
The government has also pledged to investigate the securitization of loans to builders', the statement said.
In this plan, the Chinese government
said it will promote the development of offshore engineering equipment such as drilling platforms and large tankers.
It is anticipated that the construction market of the global offshore and onshore plant to raise $ 1.26 trillion in 2017 to 989 billion dollars in 2012, according to the Ministry of Knowledge of South Korea. The oil and gas offshore market can represent 26 percent of this, the ministry said in a statement on January 7.
Earlier than expected demolition of old ships is another part of the plan, according to the statement, he asked for more military and civilian cooperation in the design and development vessel.
Authorities and local agencies should formulate policies to support and ensure the timely completion of targets, the statement said, without giving specific targets.
According to the five-year economic plan of the government which runs until 2015, the objectives for the sector include improving standards of shipbuilding and the development of products with high added value.
The combined profits of 80 major shipbuilders controlled by the China Association of National Shipbuilding Industry declined 54 percent in the first half of the year to 3.58 billion yuan ($ 584 million)
About 464 shipyards in China
About 464 shipyards in China, won 18.7 million tonnes deadweight orders worth $ 14.3 billion last year, the lowest since 2004, according to Clarkson Plc (CKN) the largest ship broker in the world. This compares to contracts with a value of 14.6 million tonnes to 29.6 billion received by 88 meters in South Korea, the second largest shipbuilding nation in the world.