Chinese Shipyard "White List" to Shrink
Clarksons Shipping Intelligence released a report earlier this week on the state of China's "White List" shipyards. The consultancy found that new requirements for listing are likely to reduce the number of the state-approved yards to 59, down from 71 – a continuation of the trend towards consolidation in the sector.
The government created the list with an initial slate of 51 shipyards in 2014. Its intention was to concentrate shipowners' orders at the strongest, most viable facilities and reinforce these “top” yards with government support. In addition to the advertising value of the White List, inclusion gives yards export tax rebates, plus better access to credit at state-owned banks.
The listed yards, many of them state-owned, are now responsible for more than 90 percent of current Chinese vessel deliveries.
According to Clarksons, the government's new exclusion criteria for the white list are bankruptcy; suspension of production; and mergers and acquisitions which join one yard with another.
In addition, listed yards must have at least one new order, one delivery and one ship under construction within the span of a one-year period.
Clarksons notes that seven out of the 71 yards are bankrupt and five have merged with other yards. These criteria would appear to automatically remove them from the listings.
In addition, nearly 20 yards out of the remaining list have not had any new orders since the beginning of last year – prompting the possibility of additional delistings ahead, Clarksons says.
Ren Yuanlin, chairman of Yangzijiang Shipbuilding, told media 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.”
The government added a separate offshore yard white list late last year, restricted to only seven members. The offshore list appeared to address analysts' concerns that unlisted conventional yards would attempt to take business from the offshore yards instead.