China Government Responding to Shipbuilders' SOS

The combined profits of 80 major ship builders monitored by the Chinese Association of the National Shipbuilding Industry nose-dived by 53.6 percent in the first half of the year to 3.58 billion yuan ($584.1 million), while business revenues plunged 18.5 percent to 120.3 billion yuan ($19.66 billion). In response the State Council has issued a support plan aimed at keeping the shipbuilding sector afloat, reports the 'China Daily'.

The Hengfu Shipyard, headquartered in east China's Zhejiang province, used to be an industrial heavyweight with an annual production capacity of 1 million deadweight tons of vessels. However, the ship producer declared bankruptcy in 2011 due to a lack of orders and mounting debts. Zhejiang province is clustered with many ship builders operating within private shipyards. But since 2009, many of them have gone belly-up like Hengfu.

According to 'China Daily', Government-backed shipyards are facing tough times, too. The CSSC Jiangnan Heavy Industry Co Ltd, one of the top five state-owned shipyards in China, recorded a severe loss of 60.31 million yuan ($9.85 million) in the first half of 2013, while its business revenue plunged 39.49 percent year on year. In 2012, the company registered a loss of 97.37 million yuan ($15.91 million).

The shipbuilding sector is closely related to 113 other industries, including iron and steel, petrochemical engineering, equipment manufacturing and digital information. The Central Government has expressed deep concerned over the industry's woes, which prompted it to come up with a 3-year support plan that includes controlling capacity, upgrading shipbuilding standards and developing higher value-added products.

Source: China Daily