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BIZCHINA / Center
Foreign funds welcome to expand ocean fleet
By Xin Dingding (China Daily)
Updated: 2007-07-06 08:23
The government will encourage foreigners to invest in China's shipping
industry to help expand its fleet, a senior official said yesterday.
The country plans to not only make its ocean-going fleet the third
largest in the world by 2010, but also improve maritime security and
better protect national interest, Cao Desheng, deputy director of the
Ministry of Communications' Water Transport Department, told China Daily.
The total deadweight tonnage of Chinese-flag flying ocean vessels will
reach 100 million by 2010, up from the present 44 million, which makes it
sixth largest in the world, Cao said.
To fulfill the goal, the ministry will encourage banks, logistics
enterprises, cargo owners and foreign investors to invest in its shipping
industry.
"They can set up new companies along with domestic shipping enterprises,
with the latter holding at least 25 percent of the total shares of a new
company to overcome worries over shipping security," he said.
Foreign investors have to necessarily register their companies in China
first, and the ships should fly the Chinese flag.
This is important because during "special times like wars, ships flying
foreign flags and with foreign sailors won't be able to take shelter in
the country". In case that is not done, shipping "essential materials
such as oil will be threatened", he said.
Also, China National Petroleum Corporation (Sinopec) and China Petroleum
& Chemical Corporation (Petrochem) will join hands with China Changjiang
National Shipping (Group) Corporation and China Shipping (Group) Company
to form a new shipping company, Cao said.
Another reason for the fleet expansion is that the Ministry of
Communications (MoC) wants more Chinese-owned ships to register at home
instead of in other countries.
High tariff and value-added tax on imports, or 27.53 percent cost of
shipbuilding, has caused many Chinese ship-owners to register their
vessels in other countries. An ocean vessel costs several hundreds of
millions of yuan, and that should give an idea about the additional costs.
According to official figures, the number of Chinese vessels registered
abroad has been increasing, and they account for half of the country's
total international tonnage.
The MoC has decided to grant tax exemption to Chinese-owned ships that
were registered abroad before 2006. This incentive is expected to make
them register at home -- in Shanghai, Tianjin or Dalian - in the next two
years, till July 1, 2009. The ministry is also discussing some long-term
policies to encourage Chinese-owned ships to register at home.
(China Daily
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