China Wants to Ban Foreign Vessels from its Inland Waterways
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In a bid to protect its domestic shipping industry from a slowing global market, China has introduced a plan to ban foreign vessels from sailing on its domestic waters, as well as block foreign shipping services from operating in China.
China will ban foreign vessels from sailing on its domestic waterways from January 1 as local operators struggle to profit amid a global shipping glut.
In a bid to protect its domestic shipping industry from a slowing global market, China has introduced a plan to ban foreign vessels from sailing on its domestic waters, as well as block foreign shipping services from operating in China.
China will ban foreign vessels from sailing on its domestic waterways from January 1 as local operators struggle to profit amid a global shipping glut.
The ban, however, which does not apply to vessels registered in Hong Kong, Macau and Taiwan, but will extend to the 6,300 kilometers Yangtze River, the world’s busiest waterway for freight.
Approximately 1.5 billion tons of cargo were shipped along the Yangtze River in 2010, according to the Changjiang Administration of Navigational Affairs.
Related Information: The Chinese Economy
Related Information: The Shipping Industry
According to a statement by the State Council, overseas investors will also be barred from engaging in river shipping, including through the use of Chinese vessels.
Chinese shipping operators will also be restricted from using foreign vessels, unless there is a shortage of Chinese ships and the company obtains permission from the State Council.
Otherwise, companies found to be using overseas vessels on rivers will face penalties including fines of as much as 1 million yuan ($160,000), it said.
[quote] The new rules are designed to promote a “healthy” domestic shipping sector and ensure safety standards, said the statement. [/quote]
Bloomberg noted that the bans comes after “the government also this month announced tax and financial support for local shipping companies after China Cosco Holdings and China Shipping Container Lines, the nation’s largest listed operators, both posted wider first-half losses.”
In September, Cosco Chairman Wei Jiafu had, ironically, called on shipping companies to avoid price wars and refrain from expanding shipping fleets.
Citing tough industry conditions that have seen freight rates fall drastically amid overcapacity and a global trade decline, he said:
[quote] No other parties should try to capitalise on the current situation in the shipping industry. We should cooperate and not be in conflict but compete fairly. [/quote]
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