Shanghai FTZ to allow foreign, private players in shipping industry

BEIJING - China will allow foreign investors to establish and own shipping enterprises, according to new guidelines intended to boost the deficit-plagued sector. The procedures outline how shipping companies fully owned and controlled by foreign investors can be founded within the China (Shanghai) Pilot Free Trade Zone.

China’s current shipping industry is dominated by large State-owned enterprises, which have struggled with low profits since the international trade crisis of 2008. Currently, more than 90% of China’s international trade is carried out by sea, but domestic shipping companies carry only 25% of China’s imports and exports. The 10 shipping companies listed in China reported a total loss of nearly RMB 1.5 billion for the first six months of this year.

Leaders in the field attribute China’s reduced shipping activity to longtime deficits, smaller fleets, and lack of modern technology. The Central Government intends to restructure the shipping sector by facilitating the expansion of certain enterprises and helping coastal cities become international shipping hubs. www.webershandwick.cn (ATI).