AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
On 6 June 2009, the Ministry of Information Industry (MII) of the People's Republic of China (PRC) issued a Planning Release entitled Restructuring and Revitalization of Planning for the Ship-building Industry. The release, which contains broad goals for support of the Chinese ship-building industry, seeks to provide guidance on maintaining and strengthening the PRC's position in the global ship-building industry. In particular, the MII recognizes that China has won a significant share of global markets and must now engage in greater R&D spending and productivity improvements in order to protect and grow its percentage of global sales of ships and shipping technology. Given the effects of the global financial crisis on sales in the latter half of the 2008, this task will require special government attention and involvement.
The Ministry has proposed eight different policy options for supporting the ship-building industry:
(1) Direction of credit facilities to provide medium- and long-term support of shipping entreprises and management in order to ensure timely production and payment of creditors;
(2) Encouragement of expanded export credits for the purchase of Chinese ships by foreigners;
(3) Encouragement, through financial leasing companies, for domestic firms to purchase scrapped ships rather than export them;
(4) Encouragement of domestic demand for Chinese ships and ocean-exploration technology through tax-rebates offered to companied engaged in off-shore oil and gas exploration;
(5) Acceleration of programs to scrap old and out-of-use ships, including through the tightening of regulations on older vehicles;
(6) Imposition of strict controls on the expansion of ship-building and docking capacity by freezing applications for increases in construction of such facilities until 2011;
(7) Improvement of policies for the encouragement of mergers and acquisitions, including those related to the resolution of excess staffing and outstanding tax and financial liabilities;
(8) Increase in state funding of research and development related to ship-building, ship maintenance and marine engineering technologies.
The Planning Release does not have legal force, but is intended to provide guidance to relevant ministries and state organs in planning for the period 2009-2011. Releases often form the basis of changes to legislation and rules by the appropriate Ministries with responsibilities identified in the various components of the Release.
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