CMA CGM Expands Relationship with China
In a bid to further increase cooperation with China, CMA CGM, the world's third-largest container shipping group, will sign major two deals with the Asian country. The agreements will put the French company in line to benefit from a forecast surge in trade between Asia and Europe.
CMA CGM said it will sign a $1 billion financing agreement with Export-Import Bank of China (CEXIM) and an agreement with transport conglomerate China Merchants (CMHI) to look at joint investments in the country's so-called "One Belt, One Road" initiative to create a network of infrastructure to boost trade.
The deal with CEXIM is to be signed on Wednesday during a visit to its Marseilles headquarters by Chinese Premier Li Keqiang, whose trip to France was expected to involve a series of deals with French companies, and provides for loans and guarantees for future orders for ships and containers from China.
One Belt, One Road involves around 300 major projects to link Asia to Europe via road, rail, electricity and internet networks, gas and oil pipelines, as well as other sea and land infrastructure.
Chinese President Xi Jinping said in March he hoped annual trade between China and the countries involved in One Belt, One Road would exceed $2.5 trillion in a decade.
"One Belt, One Road is most certainly the world's most ambitious infrastructure development project," said CMA CGM in its statement on Tuesday.
CMA CGM, which opened its first office in Shanghai in 1992, nearly 10 years before China entered the World Trade Organization (WTO), says it has a 10 percent share of the container shipping market in China.
During the second semester of 2015, Chinese shipyards will deliver three 18,000 TEUs vessels to the CMA CGM Group. Those will be the group’s largest vessels and the biggest ones to have ever been built by Chinese shipyards. They will be named after great explorers, and one of them will be christened CMA CGM Zheng He, in recognition of the famous Chinese explorer.
The French firm, whose rivals include Maersk Line, the world's largest container shipping company and part of AP Moeller-Maersk, already has a partnership with China Merchants, to which it sold 49 percent of its Terminal Link subsidiary that operates container ports.
Last year, it joined forces with China Shipping Container Lines (CSCL) in a vessel-sharing alliance also including United Arab Shipping Co (UASC) to boost efficiency on key routes in a container shipping sector battling with overcapacity.