China gives 4 shipping lines $ 293 m to upgrade fleets

Monday, 6 October 2014 00:00 - - {{hitsCtrl.values.hits}}

SHANGHAI (Reuters): China has given four shipping lines including China Cosco 1.8 billion yuan ($ 293.3 million) in subsidies to encourage them to retire and upgrade their vessels, the four companies said.

In December, China announced it would hand out subsidies to shipping lines to replace old models with new and greener ones and to generate orders for its shipbuilders, which have been hit by an order slowdown in a global shipping slump. China Cosco said on Tuesday it had received 1.3 billion yuan through its controlling shareholder, state-owned China Ocean Shipping Group, to compensate it for scrapping and upgrading old vessels. Sister company Cosco Shipping said it had received 182.9 million yuan for ship upgrades. On Monday, China Shipping Development Co. said China’s finance ministry had given it 215 million yuan in subsidies for scrapping 15 ships. China Shipping Container Lines said it had received a subsidy of 40 million yuan. The companies said they expected the subsidies to have a positive impact on their full-year results. Despite a pledge to reduce support for industries with overcapacity, the government has suggested it is reluctant to allow large ones such as shipbuilding to wither. It is currently seeking outside support for heavily indebted private shipbuilder China Rongsheng.