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Minsheng: One Belt, One Road and China’s new normal

Shanghai: Yes, shipping must get used to China’s “new normal” of slower economic growth, but for those agile enough Beijing’s One Belt, One Road policy could offer a new “golden age” for the industry. That’s the view of Lu Xiaozhong, president of Minsheng Industrial (Group) and chairman of Minsheng Shipping, who stars on the cover of the latest issue of SinoShip magazine.

Minsheng was established in Chongqing in 1925. It was reestablished in 1984, still with the Yangtze as its main focus. Today, it is one of the largest integrated logistics groups in China.

Minsheng Shipping is a joint venture founded by Minsheng Industrial (Group) and Shanghai International Port (Group) in 2009.

The line has around forty 300 teu boxships covering the Yangtze plus 18 roros with a total capacity of 12,300 ceu. On top of that there are six oceangoing container vessels as the line spreads its wings, not just along China’s coast but to other Asian destinations.

“Under the guidance of One Belt One Road released by Beijing, the company plans to expand with more large-sized Yangtze river container ships and also the ocean container vessels,” says Lu. “As the global economy has not fully recovered, the domestic economy still faces great pressure, which means it will not be a good time to greatly expand the fleet. However, to invest in some vessels with strong market demands and economic benefits is okay,” Lu continues.

“The best time for the shipping industry is coming,” Lu maintains.

Stretching from Hungary to Indonesia, Beijing estimates its much-hyped One Belt, One Road initiative will add $2.5trn to China’s trade in the next decade, more than the value of its exports in 2013.

As well as One Belt One Road, Lu points out initiatives to grow the Yangtze river economic belt plus the cooperative development between Beijing and Tianjin as reasons for cheer for local shipowners.

Lu also applauds Beijing’s ship scrapping subsidy, something that should help equilibrium return to the local shipping industry in the not too distant future.

“The shipping industry is welcoming a new golden age now,” Lu insists.

In the same breath, however, Lu contradicts himself, admitting that the industry must get used to China’s so called “new normal” economy, which means overcapacity and less demand for shipping. The days of double digit GDP growth in the People’s Republic are a thing of the past.

As well as new routes to Northeast, Southeast and South Asia this year, up next for Minsheng – very much in keeping with its adherence to One Belt, One Road policies – are services to the Middle East.

Elsewhere in the magazine are articles on China’s grain demand, the move to consolidate ports into clusters, as well as a legal feature.

The full magazine can be read online for free by clicking here.

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