China encouraging shipyard mergers

China’s government announced a two year plan to support and stimulate the nation’s shipbuilders by encouraging mergers and acquisitions in the industry and making funding available for cash-strapped producers. Measures will be taken to speed the scrapping and replacement of older ships and single-hulled oil tankers, according to a statement released on the Web sites of the National Development and Reform Commission and the Ministry of Industry and Information Technology.

China aims to hold 35% of the global market for new vessel completions by 2011, with national production capacity of 50 million tons, the statement said. Banks will be encouraged to increase credit support for yards that need funds to finish building ships, and to finance the down payments for new vessels.