The deadline for China's newbuild subsidy program should be extended, Gao Yanming, chairman of the country's Hebei Ocean Shipping (Hosco), urged at the recent National People's Congress held in Beijing.

China's central government unveiled the ship scrapping/newbuild subsidy policy at the end of 2013 for shipping companies that scrap old vessels and at the same time order new ships. The deadline for the policy to end is Dec. 31, 2015.

Gao has no issue with the ship scrapping deadline, but has suggested to extend the deadline for newbuild orders through to Dec. 31, 2018 to prevent a rush of new orders causing overcapacity in the next few years.

"A large number of shipping companies have been suffering from losses and a new wave of bankruptcies has come. The depression in the shipping industry will be intensified if the overcapacity problem is not solved," Gao warns.