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China to provide aid to shipping sector

Updated: Sep 5,2014 2:34 PM

China released a set of guidelines to bolster its sluggish shipping industry on Sept 3. That’s as China aims to build an efficient and environmentally friendly shipping industry by the end of the decade. That news sent the share prices of shipping companies soaring.

China’s shipping industry is finally seeing a long-awaited opportunity. The State Council says its guidelines will help revive the shipping sector, a move that’s crucial for expansion of China’s economy. Shares of major shippers jumped on the news.

China Shipping surged 5 percent by the close of trading today while China COSCO rose 2 percent. China’s shipping industry has a fleet size of 142 million dead weight tonnage that accounts for 8 percent of the world’s total shipping capability. China is now the world’s fourth-largest shipper and officials say the government aims to make the country Number One.

“This is the first time the state council upgraded shipping industry to national strategy, and made a long-term policy guidlines since the establishment of P.R China. This designing from the top will have a big effect to boost the shipping industry,” Ministry of Transport Vice Minister He Jianzhong said.

China’s shipping industry has been sluggish in recent years mostly because of over-capacity created by too many ships orders before the global financial crisis began. Two major state owned shipping companies -- China Shipping and China COSCO -- suffered heavy losses in the first half of this year. China Shipping posted a 490 million yuan loss while China COSCO lost 2.3 billion yuan.