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Coronavirus Policies Disrupt China's Shipbuilding Industry

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File image courtesy NTS

Published Feb 12, 2020 8:04 PM by The Maritime Executive

Chinese shipyard Jiangsu New Times Shipbuilding (NTS) has declared force majeure for the delivery of two bulkers due to the coronavirus outbreak - an example of the challenges facing shipping interests in China since new public health restrictions were enacted in January. 

"Workers are still not coming back to their positions due to the coronavirus. It is not known when they will resume work and when the two vessels will be completed," a spokesman for Jiangsu New Times told Reuters. 

In late January, the Chinese government asked employers to extend the annual Lunar New Year holiday in order to reduce the risk of spreading the infection. The break is now over, and the China Association of the National Shipbuilding Industry (CANS) reports that most shipyard workers have returned to their posts, though the percentage varies by region. 

Economic research consultancy Plenum has predicted that the public health response to the outbreak could shave as much as four percentage points off of China's economic growth in the first quarter. Domestic transport industries - rail and air - are expected to post the largest losses, as the outbreak occurred at the peak of China's annual holiday travel season. 

About 45,000 cases of coronavirus and 1,100 deaths connected to the disease have been formally reported in China to date, though the numbers may be higher. However, the reported rate of infection has been in decline for days, and Beijing has begun to issue instructions to local governments about putting economic growth back on track and promoting employment. The relief measures will include tax breaks and fee reductions for private enterprises. 

China's overseas customers will welcome the country's return to business as usual. According to Danish consultancy Sea-Intelligence, the impact on production from the coronavirus outbreak was sufficient to take 350,000 shipping containers out of global trade volume since January. In the U.S., the National Retail Federation (NRF) expects that container import volumes will decline by 13 percent at American seaports in February due to the disruption from the epidemic.