I guess that's what you call anti-cyclical behavior:
"Shanghai - already the world's busiest port by total cargo volume - is charging ahead with plans initiated during boom times to more than double its capacity...Shanghai also plans to build the world's biggest shipbuilding yard on its northern Changxing island ... Bank of Communications, China's fifth-largest bank, announced last month plans to create a ship financing division... but there will be stiff competition because Hong Kong, Singapore, Japan and Korea are not going to let Shanghai stand alone"
By the way, this snippet explains how Shanghai managed to become the world's "busiest port": It now offers free container storage:
"The programme enables shipping companies to safely store their containers, which have been idled as the global economic downturn has battered demand for exports. It also allows the company to inflate its throughput volume - which measures container volume handled not cargo loaded and unloaded"
Meanwhile, China Merchants Bank has just extended a 20 bn RMB (2.2 bn €) credit line to state-owned China Shipping Group, the country's biggest operator of container vessels.
Why did they extend the credit line? Well, if you must know: "as part of the bank's effort to support the nation's shipping industry." And just in case the money is not enough, no problem: The companies also agreed "to cooperate in the field of short-term liquidity loans".
In other news, three state-owned companies inaugurated Southern China's biggest shipyard near Guangzhou a few days ago:
"This has fully demonstrated the confidence of Baosteel and China Shipping in the Chinese shipbuilding industry's long-term development... target products include various kinds of civilian ships such as very large crude carriers (VLCC), Suezmax tankers, Aframax tankers, very large ore carriers (VLOC), bulk carriers and large container ships."
It's good that they have confidence in the "long-term development". They surely won't earn any money in the short- and medium-term building those kinds of ships. Unless of course China Shipping Group uses its new credit line to place lots of orders...?
(Source: People's Daily
But maybe I'm being too pessimistic, because here's another potential customer: Nanjing Tanker aims to quadruple its oil tanker fleet by 2011, and has secured a 2 bn RMB credit line from Agricultural Bank of China for that purpose.
This will not end well...