Beijing to tighten shipyard regulation, reduce white list

Beijing to tighten shipyard regulation, reduce white list

China’s Ministry of Industry and Information Technology (MIIT) has released a bulletin asking for opinions on proposed new regulations for domestic shipyards.

The proposed new regulations intend to improve the shipyard white list, which was released in 2014, through adding new requirements.

According to the release, shipyards that haven’t delivered ships and received new orders and haven’t had ships under construction for more than one year, as well as yards that haven’t delivered ships and received new orders for more than two years, and ones that have suspended operations and declared bankruptcy, and finally shipbuilders that have been acquired and lost legal independency, will all be removed from the white list.

So far seven of the 71 shipyards on the white list have already suspended operations or declared bankruptcy including Rongsheng Heavy Industries, Sinopacific Offshore, Mingde Heavy Industry, Sainty Marine, JES International Holdings, Zhenghe Shipbuilding and Zhejiang Shipbuilding, while four affiliate shipyards of CSIC are currently under a merger process.

The new regulations also request the shipyards to submit a self-examination report every year and authorities will conduct investigations at the shipyards every two years.

At its peak, China had more than 3,000 yards six years ago, a figure that has dropped dramatically in recent years.

A report from DNB Markets in Oslo this April predicted “a perfect storm is brewing for Chinese yards, likely to be followed by a sharp decline in newbuilding prices, capacity shutdown, and a potential new shipping supercycle at the end of the decade”.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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