China to merge two shipping companies in reform push

AFP: China will combine two of its state-owned shipping giants, the companies said, the sector’s second multi-billion-dollar merger in a month as the government pushes consolidation of its nationalised enterprises.

Sinotrans & CSC Holdings Co., the nation’s third largest shipping company, will become a wholly-owned subsidiary of China Merchants Group (CMG), a conglomerate with interests in transport, finance and property, according to company statements.

Both are among the more than 100 state-owned companies which report directly to the central government, though Sinotrans will no longer do so after the restructuring, said the State-owned Assets Supervision and Administration Commission, which oversees them.

Earlier in December, China approved the merger of another two of its biggest state-owned shipping companies, China Ocean Shipping Group (Cosco) and China Shipping Group.  

The moves follow China’s release in September of broad reform guidelines for state-owned companies aimed at making them more competitive internationally.

The latest merger will help the companies to build ‘the world’s best company to compete globally’, CMG said in its statement late Tuesday.

Sinotrans has assets of more than 100 billion yuan ($ 15 billion), while China Merchants holds assets of 624 billion yuan, the Xinhua news agency reported.

On Wednesday afternoon, CMG’s transport arm China Merchants Holdings (International) was down 1.20% in Hong Kong. 

Logistics provider Sinotrans Ltd. fell 1.41% but another unit, Sinotrans Shipping, gained 2.67%, both in Hong Kong.

China, the world’s second-largest economy, is overhauling its dominant state-owned sectors to make them more efficient as it grapples with stalling growth.

Beijing has already merged its top two train makers – China CNR Corp and CSR Corp – into a single conglomerate, aiming to avoid competition between the two as China vies for lucrative rail contracts overseas against industry giants such as Germany’s Siemens and Bombardier of Canada.

China fines seven foreign shippers for ‘price-fixing’

AFP: China on Monday fined seven foreign shippers including three Japanese firms a combined 407 million yuan ($ 63 million) for price-fixing in the latest case involving government scrutiny of overseas companies.

China’s National Development and Reform Commission (NDRC) – the top state planner and one of several agencies tasked with oversight of monopoly cases – said in a statement the Japanese firms fined were “K” Line (Kawasaki Kisen Kaisha), Mitsui O.S.K. Lines and Eastern Car Liner. 

Another Japanese shipping firm, NYK Line, was implicated but escaped a fine by cooperating, it said.

The NDRC levied the biggest individual fine of 284 million yuan on South Korea’s EUKOR Car Carriers while also punishing two Chilean companies and a Swedish-Norwegian venture.

The commission accused the companies of mutually agreeing to raise shipping costs and using unfair means to set prices – mainly on routes linking China with North America, South America and Europe.

Their actions violated China’s anti-monopoly law and ‘hurt the interests’ of its importers and exporters, it said.

The NDRC said the companies had already acknowledged responsibility and apologised.

The case follows sweeping investigations into foreign firms in China in sectors ranging from technology to autos.

US mobile chip titan Qualcomm said in February that it would pay nearly a billion dollars to end a long-running antitrust probe in China, in perhaps the biggest fine ever levied by Beijing in such a case. 

In August last year the Chinese government levied a combined 1.24 billion yuan fine on 12 Japanese auto parts firms for price-fixing.