China will ban new shipyards for three years and support domestic-vessel purchases as the nation’s shipbuilders struggle with plunging demand amid tighter credit and slowing world trade.
Banks will also be encouraged to increase trade finance to boost ship exports under a plan approved by the State Council, China’s Cabinet, according to a statement posted on the central government’s website.
China Trade Information said the government will extend financial aid for domestic buyers of long-range ships until 2012.
Chinese shipyard orders may sink by as much as 66% this year as financing becomes more difficult, the Shanghai Securities News said, citing the China Association of the National Shipbuilding Industry.
Ship owners have also pared orders as China’s waning demand for commodities and slowing exports to the United States and Europe caused freight rates to tumble last year.
Existing shipyards will also be banned from expanding for three years, according to the statement. New orders at Chinese shipyards are expected to total between 20 million and 30 million deadweight tons this year, compared with 58.2 million dwt last year.
China has also rolled out measures to boost its automotive, steel and textile industries this year as growth in the world’s third-largest economy cools to the slowest in seven years amid the global recession.
The country may also enact a stimulus for the oil refining and petrochemicals industry by next month, an official at the China Petroleum and Chemical Industry Association, who declined to be named.
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