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Home » Supplement » Lujiazui finance fair
Slower trade won't dent shipping hub regulation drafting
By Richard Fu |
June 29, 2012, Friday
|
Print Edition
Print Edition
SHANGHAI'S aim to become a global shipping center is a high priority with government policymakers and the business community, though slowing trade is affecting port traffic growth.
In the latest development, authorities said this month that China would start a trial project allowing tax refunds for containers at two domestic ports if exports are shipped from Shanghai's Yangshan Deep-Water Port. Starting August 1, Chinese exporters can also collect refunds at the river port in Wuhan and in the seaport of Qingdao, using designated shipping lines. The June 15 statement was issued by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation.
Ensuring traffic
That will greatly shorten the time for companies to get the rebates - something essential for China's many private sector manufacturers. Previously, many goods were shipped to Busan, Tokyo or Hong Kong for transit. The policy will help ensure Shanghai's port traffic, analysts said. And it comes at a time port turnover growth is moderating amid a global economic slowdown.
Shanghai expects annual container turnover to reach 33 million TEUs (twenty-foot equivalent units) by 2015, up just 4 percent from last year's 31.74 million TEUs, which is already the world's highest, according to the city's plan for the shipping industry released last month. The container traffic in 2011 rose 9 percent from a year earlier.
Asia, especially China, still remains a key investment area for companies such as Cargotec Oyj, the world's biggest maker of container-lifting gear. Chief Executive Officer Mikael Makinen said he remains upbeat on the region because the majority of the world's busiest ports are in Asia. The Finnish company this month started work on a crane facility in Taicang, near Shanghai, as part of a joint venture with a Chinese partner. Construction will take about two years.
Also by 2015, the city aims to become a major port for cruise ships, with 500 ship arrivals and departures on international lines per year, according to the five-year plan. Shen Xiaosu, deputy director of Shanghai's construction and transport commission, said the city is working on improving port infrastructure and measures to shorten the time for cruise passengers to get through customs. He indicated there could be turbulence in the industry because operating cruise lines usually requires huge capital investment and has a very long payback period.
Royal Caribbean Cruises Ltd, the world's leading cruise operator, said it will continue to accelerate investment in Shanghai, which has been its home port for four years.
"With its important geographical position and huge untapped potential, Shanghai is positioned to become a prosperous global shipping center," said Liu Zinan, managing director for China and Asia at Royal Caribbean.
The Miami-based company on June 19 introduced the Voyager of the Seas to Shanghai. At 137,276 gross registered tons, the ship ranks among the world's 10 largest and most advanced cruise ships.
Next year, Royal Caribbean will introduce yet another one of the world's 10 largest ships to China, the Mariner of the Seas, to accommodate Shanghai's rapidly developing cruise industry, Liu said.
Pricing clout
Shanghai is also aiming to increase its pricing clout in the shipping industry with indexes. The Shanghai Shipping Exchange is planning to develop more international indices to track tanker freight rates, dry freight rates and ship carbon emissions, according to President Zhang Ye.
Because of China's trade surplus, the bourse has launched a container freight index to serve domestic exporters that ship goods like garments, toys and electronic products via container boxes.
But for Shanghai to develop the dry cargo and oil tanker freight rates would be much more difficult because it will require the exchange to obtain data from foreign ship lines carrying iron ore and crude oil to China, Zhang said. The most widely watched global benchmark for dry freight rates is the daily Baltic Dry Index, based out of London.
And like many other industries, the emergence of a bigger shipping hub in Shanghai carries a cost to the environment. That will put pressure on Shanghai's energy saving efforts, said Shang Yuying, a vice director of the Shanghai Commission of Economy and Information Technology. The increasing number of ships and planes arriving and leaving Shanghai will create "rigid growth" in energy use, she said.
In the latest development, authorities said this month that China would start a trial project allowing tax refunds for containers at two domestic ports if exports are shipped from Shanghai's Yangshan Deep-Water Port. Starting August 1, Chinese exporters can also collect refunds at the river port in Wuhan and in the seaport of Qingdao, using designated shipping lines. The June 15 statement was issued by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation.
Ensuring traffic
That will greatly shorten the time for companies to get the rebates - something essential for China's many private sector manufacturers. Previously, many goods were shipped to Busan, Tokyo or Hong Kong for transit. The policy will help ensure Shanghai's port traffic, analysts said. And it comes at a time port turnover growth is moderating amid a global economic slowdown.
Shanghai expects annual container turnover to reach 33 million TEUs (twenty-foot equivalent units) by 2015, up just 4 percent from last year's 31.74 million TEUs, which is already the world's highest, according to the city's plan for the shipping industry released last month. The container traffic in 2011 rose 9 percent from a year earlier.
Asia, especially China, still remains a key investment area for companies such as Cargotec Oyj, the world's biggest maker of container-lifting gear. Chief Executive Officer Mikael Makinen said he remains upbeat on the region because the majority of the world's busiest ports are in Asia. The Finnish company this month started work on a crane facility in Taicang, near Shanghai, as part of a joint venture with a Chinese partner. Construction will take about two years.
Also by 2015, the city aims to become a major port for cruise ships, with 500 ship arrivals and departures on international lines per year, according to the five-year plan. Shen Xiaosu, deputy director of Shanghai's construction and transport commission, said the city is working on improving port infrastructure and measures to shorten the time for cruise passengers to get through customs. He indicated there could be turbulence in the industry because operating cruise lines usually requires huge capital investment and has a very long payback period.
Royal Caribbean Cruises Ltd, the world's leading cruise operator, said it will continue to accelerate investment in Shanghai, which has been its home port for four years.
"With its important geographical position and huge untapped potential, Shanghai is positioned to become a prosperous global shipping center," said Liu Zinan, managing director for China and Asia at Royal Caribbean.
The Miami-based company on June 19 introduced the Voyager of the Seas to Shanghai. At 137,276 gross registered tons, the ship ranks among the world's 10 largest and most advanced cruise ships.
Next year, Royal Caribbean will introduce yet another one of the world's 10 largest ships to China, the Mariner of the Seas, to accommodate Shanghai's rapidly developing cruise industry, Liu said.
Pricing clout
Shanghai is also aiming to increase its pricing clout in the shipping industry with indexes. The Shanghai Shipping Exchange is planning to develop more international indices to track tanker freight rates, dry freight rates and ship carbon emissions, according to President Zhang Ye.
Because of China's trade surplus, the bourse has launched a container freight index to serve domestic exporters that ship goods like garments, toys and electronic products via container boxes.
But for Shanghai to develop the dry cargo and oil tanker freight rates would be much more difficult because it will require the exchange to obtain data from foreign ship lines carrying iron ore and crude oil to China, Zhang said. The most widely watched global benchmark for dry freight rates is the daily Baltic Dry Index, based out of London.
And like many other industries, the emergence of a bigger shipping hub in Shanghai carries a cost to the environment. That will put pressure on Shanghai's energy saving efforts, said Shang Yuying, a vice director of the Shanghai Commission of Economy and Information Technology. The increasing number of ships and planes arriving and leaving Shanghai will create "rigid growth" in energy use, she said.
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