China has issued further guidance to support and modernize its shipping industry, saying it would encourage mergers and private investment as well as develop its cruise industry.
The world's biggest trading nation is focusing on the shipping industry as it grows more assertive over territorial disputes in the South China Sea, unnerving neighbors such as Vietnam and Japan, and looks to secure its supply chains.
It comes as the global shipping industry has been struggling to recover from a prolonged slump brought on by a glut of ships ordered before the global financial crisis of 2008/09. That has weighed on freight rates in recent years, resulting in heavy losses at firms such as China COSCO (601919.SS).
The Ministry of Transport laid out how it planned to implement reforms in a document on its website on Friday, saying it aimed to achieve most of its targets over the next four years. It first published a set of guidelines in September to support and develop its shipping industry.
Chinese shipping shares rose across the board on Monday in both Hong Kong and the mainland, led by the country's largest dry bulk shipper, state-backed China COSCO (1919.HK). Its Hong Kong-listed shares rose 4 percent to its highest level since January 2013, while state-owned rival China Shipping Development's shares (1138.HK) rose 1.57 percent.
In the Oct. 31 document, the government said it would conduct research how to promote mergers and acquisitions between the industry's firms, with a view to encourage specialization, and would also actively encourage mixed-ownership reform of its state-owned shipping firms.
Finance and insurance institutions would be asked to increase support for the shipping industry to help promote the development of the country's ship leasing and insurance sectors, with the aim of achieving results by 2015, it said.
Foreign companies would also be allowed to set up firms without Chinese joint venture partners in Shanghai's free trade zone, and qualified Chinese firms would be encouraged to expand their overseas businesses, it added.
China, which is looking to build its first luxury cruise ship with operator Carnival Corp(CCL.N), also aims to build up to three cruise home ports by 2020, and will start cruise transport pilot projects in Tianjin, Shanghai, Fujian and Hainan to expand its local network, the ministry added.
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