China Extends Ship Scrapping Subsidy Program

SHANGHAI, June 23 (Reuters) – China on Tuesday prolonged by two years a subsidy programme that encourages delivery firms to scrap previous vessels in a bid to help an trade struggling to emerge from a world downturn.

The scheme, which started in 2013 and was as a result of finish this 12 months, offers delivery traces grants of 1,500 yuan ($241.67) per gross ton to exchange previous vessels with newer, extra environmentally pleasant fashions.

These subsidies helped state-backed shippers together with China COSCO and China Shipping Development to publish a better 2014 revenue regardless of the stoop within the world trade. China Cosco mentioned it will have posted a loss had it not been for the subsidies.

“The shipbuilding and shipping industries are facing a very difficult downturn, the scheme’s extension reflects their needs,” mentioned Zhang Shouguo, government vice-chairman of the Chinese Shipowners’ Association.

The scheme’s extension to end-2017 was introduced in a joint assertion by the Ministry of Transport, the Ministry of Finance and the National Development and Reform Commission.

China’s financial slowdown has squeezed the worldwide delivery trade, which has been caught in a rut since 2008 partly as a result of an extra of vessels ordered earlier than the monetary disaster of that 12 months, that has pushed freight charges all the way down to historic lows.

New orders at Chinese shipyards plunged 77 p.c year-on-year within the first three months of 2015, the China Association of the National Shipbuilding Industry mentioned in April. ($1 = 6.2067 Chinese yuan renminbi) (Reporting by Brenda Goh; Editing by Miral Fahmy)

(c) Copyright Thomson Reuters 2015.