China's Ministry of Industry and IT has announced that China's shipyards will nearly double their shipbuilding capacity from now until 2011 (from 28.8 m deadweight tons to 50 m).
And they don't mind spending government money:
"The government will extend credit support to shipyards that were hit hard by plunging orders and will offer loans to foreign companies buying China-built ships and vessels, the plan said."
(Not to mention that most big shipyards are government-owned SoEs anyway, i.e. their profits and losses belong to the government.)
New orders in Jan-April 2009 are down 95 % compared to 2008, but so what: Expanding capacity is always more fun than downsizing!
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Shaun Rein on the TSM
vor 10 Monaten
From all the industries that I can think of shipyards are having by far the most overcapacity. Why keeping that?
AntwortenLöschenWhat baffles me is that they don't only intend to keep existing capacity "alive", but are aggressively pushing ahead with rapid capacity expansion. It's madness, IMHO.
AntwortenLöschenChina's biggest competitor in the mass-market ship-building business is Korea, I think.
IMO, keeping the current capability of these qualified shipyards 'alive', to me, seems not wrong. It would be a bit short-sight for a country to expand in blooming period and shrink in raining-days, and it also causes waste and is unstable.
AntwortenLöschenAs for expanding the capacity, maybe Chinese Gov. has a positive perspective towards global economy. Anyway, as you said Chinese Gov. has so much money no way (or not sure how. They already bought too many American bonds) to spend, and spending on building and offering more jobs maybe help to solve some domestic problems....
According to Chinese Gov. it's a long term thing, and besides it's (also my opinion) a chance to install new tech. from other countries.
In a word, Gov. is not short of money, the plan could help regarding some problems, and probably it will get better tech. so why don't do it now? it would be a bit too late to catch up in a flourishing future (if it comes).
But who will buy all those ships?
AntwortenLöschenI don't know. Who can predict it?
AntwortenLöschenMaybe there will be a 'Black schwan'. :-P
Personally, I'm more inclined to believe that the world will need very little shipbuilding capacity for at least the next 5 years, and most of the already existing capacity will be idle.
AntwortenLöschenSo anything that goes beyond "conserving" (and possibly modernizing) the already existing capacity sounds like a waste of money to me.
Even the existing capacities are not needed. In the shipping boom many ships were ordered from yet not existing yards. Now those yards exist (and they are pretty modern, because they yre fresh build), but the orders are being cancelled - even at hefty cancellation fees. Especially for container ships the outlook is worse than bleak...
AntwortenLöschenHere's another downbeat article regarding the business prospects of China's shipyards:
AntwortenLöschenhttp://en.ce.cn/Industries/Basic-industries/200906/09/t20090609_19272893.shtml
I agree that even the existing capacity won't be needed for the next few years, but I can sort of understand why the Chinese government doesn't want to close down brand-new shipyards. Why they want to build even more of them (and not just a few, but lots) is completely beyond me.