China Association of National Shipbuilding Industry says the industry needs to raise at least Yuan200bn ($29.4bn) through public funding to prop up the country’s shipbuilders.
CANSI president Zhang Guangqin said Chinese shipbuilders were finding it difficult to raise capital from the markets to fund their newbuilding projects.
If the industry failed to establish an effective fundraising platform for domestic shipbuilders, there are concerns newbuilding orders will be diverted to shipbuilders in other countries.
While 80% of the Chinese shipbuilding orderbook is for export, Mr Zhang urged the raising of domestic funds to support domestic shipbuilding.
At least Yuan200bn in funding needs to be raised and pooled to boost domestic demand.
However, Daiwa Institute of Research (Hong Kong) analyst Geoffrey Cheng noted fundraising was not the only concern for Chinese shipbuilders.
“The technology of Chinese shipbuilders are still lags behind other countries such South Korea. To revive the Chinese shipbuilding industry, capital and technology sides have to be well integrated.”
In spite of the strong appetite for new funding from the industry, a Yuan20bn Tianjin-listed shipping trust was postponed as a result of the unfavourable economic conditions.
Tianjin vice-mayor Cui Jindu said that the fund’s listing was pushed back in the first quarter due to the slowdown of the fundraising process, but he was confident the fundraising initiative could be completed by the end of the year.
The shipping trust, which received the approval from the National Development & Reform Commission last August, aims to help ailing shipbuilders through directly investing in bulkers, tankers, containerships and other newbuildings.
Mr Cheng doubted the trust would get a positive market response if it does public later in the year due to the volatile market condition.
Singapore pioneered shipping trusts and there are three trusts listed on the Singapore Exchange. However, their fleet acquisitions were accomplished through internal funds, debt and equity.
OCBC Securities Carol Wong earlier said there was limited investor appetite for debt-driven business models.
Commenting on general market conditions, Mr Zhang played down the impact of order cancellations on shipbuilders.
Despite around 200 newbuilding orders being reported cancelled, the proportion would not exceed 5% the shipbuilders orderbooks he said. Newbuilding deliveries for the whole year would stand at 100m dwt, he added.
CANSI president Zhang Guangqin said Chinese shipbuilders were finding it difficult to raise capital from the markets to fund their newbuilding projects.
If the industry failed to establish an effective fundraising platform for domestic shipbuilders, there are concerns newbuilding orders will be diverted to shipbuilders in other countries.
While 80% of the Chinese shipbuilding orderbook is for export, Mr Zhang urged the raising of domestic funds to support domestic shipbuilding.
At least Yuan200bn in funding needs to be raised and pooled to boost domestic demand.
However, Daiwa Institute of Research (Hong Kong) analyst Geoffrey Cheng noted fundraising was not the only concern for Chinese shipbuilders.
“The technology of Chinese shipbuilders are still lags behind other countries such South Korea. To revive the Chinese shipbuilding industry, capital and technology sides have to be well integrated.”
In spite of the strong appetite for new funding from the industry, a Yuan20bn Tianjin-listed shipping trust was postponed as a result of the unfavourable economic conditions.
Tianjin vice-mayor Cui Jindu said that the fund’s listing was pushed back in the first quarter due to the slowdown of the fundraising process, but he was confident the fundraising initiative could be completed by the end of the year.
The shipping trust, which received the approval from the National Development & Reform Commission last August, aims to help ailing shipbuilders through directly investing in bulkers, tankers, containerships and other newbuildings.
Mr Cheng doubted the trust would get a positive market response if it does public later in the year due to the volatile market condition.
Singapore pioneered shipping trusts and there are three trusts listed on the Singapore Exchange. However, their fleet acquisitions were accomplished through internal funds, debt and equity.
OCBC Securities Carol Wong earlier said there was limited investor appetite for debt-driven business models.
Commenting on general market conditions, Mr Zhang played down the impact of order cancellations on shipbuilders.
Despite around 200 newbuilding orders being reported cancelled, the proportion would not exceed 5% the shipbuilders orderbooks he said. Newbuilding deliveries for the whole year would stand at 100m dwt, he added.