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Shipbuilding stimulus plan under discussion

By Tong Hao (chinadaily.com.cn)
Updated: 2008-12-29 18:37

A stimulus program to revive China's shipbuilding industry is currently under discussion and will be submitted to the State Council, China's Cabinet, for approval at the beginning of 2009, a senior industry official said.

Special Coverage: Coping with Financial Crisis Related readings:  China's ship building down 44%  Shipbuilding industry to see blue in three years  Ports' toughest time still ahead  Machinery: Shipping industry in troubled waters

The program - drafted mainly by the country's top economic planning body, the National Development and Reform Commission (NDRC) - will cover a raft of supportive policies to boost the shipbuilding sector such as fiscal policy, tax reform and research and development assistance, China Business News reported, citing Zhang Guangqin, chairman of China Association of the National Shipbuilding Industry.

"The program provides detailed instructions to Chinese shipbuilders that will help them cope with the financial crisis in the next 2 to 3 years," Zhang said.

The stimulus package will emphasize shipping of energy resources and strategic materials such as crude oil by State-owned fleets.

"For example, many goods in China are now transported by foreign ships and thus Chinese shipping enterprises have great potential to explore domestic demand," Zhang said.

The Baltic Dry Index (BDI), which measures the demand for shipping capacity against the supply of dry-bulk carriers, dropped by 93.7 percent from a peak of 11,793 on May 20 to 744 on Dec 24. Moreover, Chinese shipbuilders reported a 44-percent drop in new orders during the first 11 months of 2008.