China: Experts applaud shipbuilding stimulus plan

Experts are applauding the support plan for shipbuilding industry. They say the plan will not only help solve the short-term problems, but also aim at boosting the whole industry's prosperity in the long term. Insiders say the global financial crunch has greatly affected China's shipbuilding industry. Enterprises have seen slid orders, difficulties in financing and postponed transactions. Insiders say the stimulus measures will help solve the problems.
Cao Yousheng, vice director of Shipbuilding Tech & Economy Institute says, "the measures to speed up eliminating outdated ships are just aimed to stimulate domestic demand. To achieve the goal, the plan also encourages domestic shipping agents to buy ships at home-grown ship makers."
China's shipbuilding industry has been weak in self-innovation. Key equipment with advanced technologies and high added value has to be imported overseas.
Meanwhile, development of related equipment also lags behind the industry's progress. Nearly half of the marine diesel engines are imported. While self-designed offshore engineering equipment only accounts for 5 percent of global market shares.
However, shipbuilding capability in China has been strengthened too fast, leading to hidden troubles in overstock.
Cao Yousheng says, "it's estimated that in next two years, global needs in new ships will decline to 60 million ton burden. But the worlds' capabilities of ship making by that time are expected to reach 200 million ton burden. Both the world and China will face much pressure on superfluous manufacturing capabilities."
To help ease such pressure, the stimulus plan proposes to boost coalition between shipbuilding enterprises, upgrade innovative technologies and strictly control construction of new shipbuilding establishment.
Cao Yousheng says, "these measures will not only help solve the current problems, but also aim at boosting long-term development in the sector."
Experts say some domestic backbone shipbuilders now have orders up to 2012. The real impacts of the financial crisis on shipbuilding industry are likely to emerge in 2011. The implementation of the stimulus plan will probably help create huge opportunities for China's shipbuilding industry amid the crisis.