According to China Daily, the nation’s shipbuilding sector is suffering from a shortage of funds.
China’s Ship builders received 1.18 million deadweight tons (DWT) of new orders in the first five months this year, a decrease of 96 percent year-on-year, according to statistics from the Ministry of Industries and Information Technology.
Meanwhile, orders of 55 vessels, or 2.32 DWT, were cancelled during the same period, about 1.2 percent of the industry’s total holding orders as of the end of May, said the ministry.
Financial gap
“The (world’s) shipbuilding industry may face a financial gap of $300 billion in the next four years, with Chinese ship builders awaiting $60 billion to tide over the plight,” said Gao Zefeng, a senior credit manager with The Export-Import Bank of China (China Eximbank), quoted by the 21st Century Business Herald.
“We come up and lend to the top 20 ship owners overseas, in an effort to make them order ships in China,” said Gao. Unlike the Eximbank’s vigor in lending, most domestic banks are cautious, even as the country’s top economic planner vowed to fund the industry in early June.
Risk control
An insider from ICBC, the world’s largest by deposit, said that loans are made on consideration of risks, instead of governmental policies. “One barometer for risk control is that ship builders have orders on hand,” said another insider.
Judging by released information, only Jiangsu Rongsheng Heavy Industries Co, the country’s biggest private shipbuilder, got 11.25 billion yuan in credit line last month, after secure an order to build four vessels for an Oman client.
Credit support crucial
“The holding orders for domestic ship builders may sustain their production until 2012, but credit support would be crucial for them survive the downturn,” said Zhang Guangqin, president of China Association of the National Shipbuilding Industry (CANSI).
More information: https://www.chinadaily.com.cn/bizchina/2009-07/02/content_8347788.htm[China Daily]
