Shipbuilders eye growth in clients along the Belt and Road

Countries and regions along the Belt and Road Initiative have become the main clients for China's shipbuilding industry this year. The former are seeking to harness the potential of oceans to boost their economic growth, officials said.

The Initiative, proposed by China in 2013, is a trade and infrastructure network that includes the Silk Road Economic Belt and the 21st Century Maritime Silk Road. The network connects more than 60 countries and regions in Asia, Europe and Africa.

China exported a wide range of ship-related products worth $14.62 billion in the first half of this year, up 12.8 percent year-on-year, according to the China Association of the National Shipbuilding Industry, a Beijing-based body.

Guo Dacheng, president of the association, said China-made offshore pipe-laying vessels, dredgers, oil tankers, deepwater semi-submersible drilling units and long-range fishing vessels have become popular in the countries and regions along the two trading routes. Many of them believe their future will be greatly supported by the ocean economy.

Exports of ocean-bound products to Singapore surged 65.4 percent year-on-year to $3.07 billion between January and June, while those to Myanmar rose substantially to $884 million.

Hong Kong received shipping products worth $3.74 billion from the Chinese mainland. China supplied various vessels to Malaysia and the United Arab Emirates worth $332 million and $268 million respectively in the same period.

Guo said export volumes of container ships and bulk vessels dropped notably during this period due to falling global demand for goods and commodities. Export volume of oil tankers grew sharply as many oil companies placed orders when prices were still relatively low.

Between January and June, Jiangsu and Guangdong, China's traditional shipbuilding provinces, exported $4.71 billion and $1.91 billion worth of ships, up 33.6 percent and 86 percent year-on-year, respectively.

Chinese shipyards received orders for new vessels with a collective capacity of 11.19 deadweight tons in the first half of the year, accounting for 27.6 percent of global market share. South Korea's shipbuilding industry, a powerful rival of China's, held 44.6 percent of the world's market share during the same period.

As the world's largest shipbuilding country, China has 1,600 shipbuilding-related enterprises, including 800 large shipyards, that employ 1.4 million people, with an annual industrial output value of 800 billion yuan ($130 billion), according to the National Development and Reform Commission.

Guo said China will continue to lag its foreign competitors as prolonged excess capacity continues to crimp industry profits and drive smaller shipyards out.

Huai Jinpeng, vice-minister of the Ministry of Industry and Information Technology, said the government will continue to cut its vast shipyards network to get industrial growth back on a healthy track next year. Excessive size hampers the industry's earning ability amid cheap vessel prices, irrational expansion and speculation in the shipbuilding sector, he said.

"China will drastically curb the number of shipyards, docks, berths and maintenance facilities it would open," said Huai. "Blind investment in the shipbuilding sector must be restrained, especially in the regions of the Bohai Bay, Pearl River Delta and Yangtze River Delta," Huai said.