Greater China

RMB ship finance is the future

Tianjin: The world economy is still weak and may not offer sufficient support to the shipping industry, and banks, particularly European banks, will have limited capacity and motivation to satisfy their shipping clients’ demand for funding, Shen Zhao, manager, shipping finance department at the Bank of Communications said at Marine Money’s conference on Tuesday.

“The Asian banks may upgrade their support to protect their ship exports, but it will be still on a very selective and cautious basis for the banks to extend the credit facility,” Zhao said, adding that Chinese banks’ large capitalization and healthy balance sheet are raising expectation in the shipping community. The establishment of an offshore RMB pool is also in progress.

However, Zhao also warns that there are still shortages of talent and experience in the industry, and China’s tight monetary policy, heavy reliance on the established relationships and expectations of RMB appreciation (leading to losses in USD lending) are the current big challenges.  [28/11/12]

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