The prolonged slump in China's shipbuilding sector has prompted Beijing to unveil a three-year plan aimed at reviving the country's shipbuilders.
The 2013-2015 plan, revealed by the State Council, has outlined key areas of focus that would raise the efficiency of the sector and position it as a global competitive industry.
The plan is expected to witness the advancement of technology in the shipbuilding sector, an expansion into offshore shipbuilding and equipment construction, a strict control on adding new yard capacity, a quicker phasing out of old vessels, the enhancement of corporate management and services, and the capturing of a larger global market share.
“Due to the global financial crisis, the international shipping market has been experiencing a downturn, leading to a severe drop in new vessel orders and a plunge in newbuilding prices. As a result, China's yard overcapacity has exacerbated and the industry's development prospects are now facing unprecedented challenges,” said a statement from the State Council.
In the first half of this year, Chinese shipbuilders received 22.9m dwt of new orders, a jump of 113.2% year-on-year, according to data from China Association of the National Shipbuilding Industry (Cansi). However the combined profit of 80 major shipyards plunged 53.6% year-on-year to RMB3.58bn ($584.06m).
China Rongsheng Heavy Industries, China's leading privately-owned shipbuilder, has recently appealed for cash from the government as it suffered heavy losses due to a sharp decline in newbuilding orders and prices.
China had more than 3,000 yard enterprises including about 400 larger yards at the start of 2010. By 2011 when the shipbuilding recession hit home, throngs of small to medium sized private enterprises shut down or filed for bankruptcy. Today, there are roughly 1,600 yards scattered across the country, and 50% of them are predicted to go bust over the next one-and-a-half years.