Foreign investors to be allowed to set up shipping enterprises
September 30, 2014 Category Logistics, Ports & sea transport
China will allow overseas investors and private Chinese companies to establish shipping enterprises, according to the “Guidelines on promoting a healthy development of the maritime industry”, a new 15-point policy. Zhang Shouguo, Vice Chairman of the China Shipowners’ Association, said that he had been expecting the release of the policy for years. Shipping businesses fully-owned and controlled by foreign investors can be set up in the China (Shanghai) Pilot Free Trade Zone (FTZ). The 10 shipping companies listed in China reported a total loss of nearly CNY1.5 billion for the first six months of this year, according to their financial reports. He Jianzhong, Vice Minister of Transport, said at a Beijing news conference that Chinese shipping companies’ technological capability was weaker than foreign competitors. Currently, more than 90% of China’s international trade is carried out by sea, but only 25% of China’s imports and exports are carried by domestic shipping companies. The Vice Minister said that there are more than 240 shipping companies in China and their fleets have a total cargo capacity of more than 100 million metric tons, accounting for 8% of the global cargo shipping industry. To boost the industry, the central government has decided to restructure the shipping sector by prioritizing its development as a national strategy, facilitating the expansion of selected enterprises and helping coastal cities build “international shipping hubs”. Favorable taxation and fiscal policies will play an important role in enhancing shipping enterprises’ capacity and making them greener and more competitive, the guidelines said, noting the government plans to create a modern shipping industry by 2020. Over the past year, the Ministry of Transport has abolished 26 administrative approval procedures that governed shipping operations, aiming to reduce government intervention, He said. Because of high tax burdens, from corporate tax to seafarers’ salary tax, and red tape in vessel registration and importation, most Chinese shipping companies sailing international routes have shunned the homeland, setting up operational bases in low-taxed jurisdictions and flying their vessels with foreign flags. The guidelines also encourage development of sea-rail intermodal and inland waterway transport.
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