China considering licensing shipbuilders

Last year, the State Council of the People’s Republic of China set specific targets that would see the shipbuilding industry reach an output of 17 million dwt and a capacity of 23 million dwt by 2010 and an output of 22 million dwt and capacity of 28 million dwt by 2015.

However, investors have been so eager to get a slice of the Chinese shipbuilding pie that industry capacity could exceed 40 million dwt annually by 2010 if all the plans that are currently in the works come to fruition. However, according to Shanghai Security News, the Commission of Science, Technology and Industry for National Defence, the sector’s main watchdog, published a draft of a shipbuilding license management law.

The licensing system is planned to encourage Chinese shipyards to adopt advanced equipment and technologies, as well as modern management methods. It is an attempt at improving ship quality and security, promoting environmental-friendly production, eliminating out-dated production capacities, and optimizing and upgrading the ship industry structure. However, withholding licenses would also serve as one way of keeping expansion under control.

The draft stipulates that companies without shipbuilding licenses are prohibited from production. Those using faked or manipulated licenses or submitting false application materials for a license will be fined between 100,000 yuan ($13,247) and 500,000 yuan. Their illegal income will be confiscated and their direct principals will be fined 20,000 to 100,000 yuan.