China Picks Top Offshore Shipbuilders

The Chinese Ministry of Industry and Information Technology (MIIT) has selected seven shipyards for its offshore “white list,” which follows a similar list of conventional shipyards announced in 2014.

The move is seen as a measure to cut overcapacity in Chinese shipbuilding as the offshore industry enters a period of decline. Benefits of listing are unclear for offshore yards, but could include easier access to financing from Chinese banks and a boost in orders from foreign clients, who may prefer doing business with a listed company.

An industry source told local news that inclusion meant that a shipyard was considered an “excellent enterprise” and had a clean record.

The yards included on the offshore “white list” include CIMC Raffles, China Merchants Heavy Industry, Cosco Qidong Shipyard, Shanghai Waigaoqiao Shipbuilding, Shanghai Zhenhua Heavy Industries Company, Dalian Shipbuilding Industry Offshore and Cosco Nantong Shipyard.

MIIT could announce additional top-ranked yards and benefits for listed shipbuilders at a future date. Several companies were added or removed to the earlier list for conventional shipyards since its debut in 2014. Rule-abiding companies on the larger conventional list are eligible for export tax rebates, among other benefits.

The list for conventional yards singles out about five dozen for preference out of hundreds – by some counts, over a thousand – competing entities.

Analysts have voiced concern that this conventional “white list” would create a “blacklist” of the remaining unlisted yards, which might then choose to compete in the offshore sector in order to make up for lost market share.

The new offshore list would appear to address this concern and reinforce the position of the top existing specialist yards as Beijing pushes forward with consolidation.

Ren Yuanlin, chairman of Yangzijiang Shipbuilding, told a media source in 2014 that “the end result of the consolidation period will see only ten Chinese shipyards accounting for 75% of the country’s shipbuilding market share.”