Privately-owned Chinese shipyards are not under threat from closure, and, just like state-owned facilities, are receiving support from the country’s government to keep employment high and the economy moving.
In contrast to the widely held view in the maritime industry that as newbuilding orders dry up, private yards will struggle to find business, Keen Maritime Services managing director John Su says the Chinese government is so concerned about unemployment it will not let these facilities fail.
As a Chinese-born broker and consultant that is based in Athens, he is the middle man for a number of foreign deals taking place but is also is heavily involved with China’s domestic market and says its banks are so influenced by central government they will continue to lend to shipbuilding yards and owners to sustain a robust economy.
“The government doesn’t care about owners and overcapacity, they care more about jobs and the economic fallout from a yard collapsing and so even the private yards will get support,” he told the Mare Forum Italy in Sorrento.
Added to this, Mr Su says there is more domestic newbuilding ordering activity taking place in China than the rest of the world realises.
“It’s scary to think but there are a lot of orders that are not known to brokers,” he said, making reference to a contract reported by brokers such as Clarksons last week for an order of two confirmed 205,000 bulk carriers, and options for six more, at Qingdao Yangfan Shipbuilding for owner HongXiang Shipping.
“This order was already placed last year and is just one example,” highlighting the extent to which the shipping industry does not know the true size of the global orderbook.