China's shipbuilding industry is in the maturation phase as a whole with a better operation compared to the other manufacturing industries. However, the profitability is on the low side because of the fierce competition. Sizeable enterprises gained superiority by their large scale. Take shipping industry for an example. Large shipping enterprises accounts for only 12.03% of the total enterprises, but occupied 83.42% of the total assets, 74.03% of the sales revenue and 72.83% of the total industrial output value. But they still suffer great deficit because of the lower technical levels. Presently, shipping industry's reorganization has become a worldwide tidal wave, therefore China's shipbuilding enterprises accelerated their reformation too.
Influenced by the shipping market and the world economic situation, the demand for shipping is unstable. There are two characteristics in shipping demand: active transactions and increasing orders; ship price becomes higher, shipping index increased by 4 percent. As for supply, the total supply capability is obviously strengthened due to the massive infrastructure construction during the ninth “five-year plan”. We predict that demand of the ships for civil use will reach 11 million tons in 2005; the production capacity of China's shipping industry will reach 9 million deadweight tonnage.
China's shipping industry is mainly centralized in coastal areas such as Shanghai, Zhejiang, Jiangsu, Guangdong and Liaoning. Shipbuilding industry's sales revenue of the four provinces ranked the top 4 places in the last three years. The Changxing shipbuilding base, the largest of its kind in the world, has started construction in Shanghai, indicating that Shanghai's shipbuilding has started its global-level developing strategies, and China has gained the first success in its goal to be a strong shipbuilding country. Shipbuilding of Liaoning province is also well performed with the support of China's northeastern development policy. Liaoning shipbuilding industry will be in three steps to get triplicated. Liaoning's shipbuilding capability will reach 9 million tons, and the output will reach 8 million tons.
After analyzing the capital structure of China's shipping industry we can see that, with the support of state policy, shipping enterprises' financing is easier than other industries. However, problems like singularity in shipping enterprises' capital source, few financing projects and choices appear accordingly. Financial leasing, an important way for ship financing adapted globally, doesn't develop well in China.Professional level of the financial institutions and sizeable shipping finance leasing companies are key factors to obstacle the development of the financial leasing of China's shipping industry. From the ownership structure point of view, state-owned enterprises get the first place in quantity, asset, sales revenue, but suffers deficiency, too. Just as other SOEs.
The development of China's shipping sub-industries is unbalanced. Although the shipbuilding industry, the most important sector of the shipping industry, is developing rapidly and has got the third position in the world, the output value of China's shipbuilding is not very high, ranking only the 6th in the world. The main reason for this is the deficiency of supporting industries' development, which lead to the fact that 60% of the products for ship use need importation, so the benefits is on the low side. With the rapid development of imports & exports trade and fleet, the ship-repairing industry developed a lot, whose output value reached 8 billion yuan with $360 million export value in 2003. Quite contrary with that, there is a great lag in China's ship-breading industry.
In conclusion, though there are many opportunities in China's shipping industry, there are many risks such as fluctuating material prices, technical problems, and the fierce competition, market risks, policy risks, exchange rate risks, etc.
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