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Several Opinions of General Office of the Transportation Ministry on improving the Transformation, Upgrading and Healthy Development of Shipping Industry

2013-09-04

Department (Commission) of Transportation of each Province, Autonomous Regions, Direct-controlled municipality, Transportation and Port Authority of Tianjin and Shanghai, Navigation Authority of the Yangtze River and the Pearl River, each directly affiliated Maritime Safety Administration, China Classification Society, China Shipowners’ Association, and each central shipping conglomerate:

 

As a large maritime country, our shipping industry is an important support of the national economy, export trading and the social development. Under the influence of the slowdown of domestic economy, the serious excess capacity, the increase of operating cost and other factors, the current shipping market remains to be imbalance between supply and demand and continues being weak, which will make negative effects on the operation of national economy, social stability and safety of production. To carry out the spirit of "Circular of the State Council Concerning the issuance of the implementation plan (from 2013-2015) on shipbuilding industry accelerating the structural adjustment to promote the transformation and upgrading " (Guo Fa [2013] N0.29), in accordance with the general requirement of steady growth, adjusting structure, promoting the developments, and to have a positive response to the current grim situation faced by the shipping industry, now the following opinions on promoting transformation, upgrading and healthy development of the shipping industry are put forward as follows.

 

A. Eliminate old ships and optimize the structure of transport capacity

 

(a) Reduce the inventory of capacity and optimize the fleet structure. Adjust and extend the Policy on old vessels and single-hull tankers being scrapped and updating ahead of schedule to December 31, 2015, and encourage old ocean vessel and Coastal vessels being crapped ahead of schedule. Actively promote the standardization of inland ship, guide old river transport vessel to accelerate the elimination and renovation, the central government and local governments will provide funds annually as subsidies during the period 2013 - 2015. Strictly enforce the mandatory retirement system according to the ship’s age, ship reaching mandatory retirement age must be scheduled to exit the market.

 

(b) Regulate domestic capacity increment. Encourage the construction of vessels that meet the new international standards, new conventions, new ship safety and environmental protection energy-saving standards. Boot coastal dry bulk vessel capacity and orderly develop. Strictly control of Chinese nationality international voyages vessels to concurrently engage in domestic transportation. Continue to control the domestic coastal and Yangtze River passenger transportation of dangerous goods to improve new business entities, and to orderly run passenger transport of dangerous goods shipping capacity in accordance with total control, the principle of merit-based selection. Continue to strengthen the capacity of the Yangtze River dry bulk macro.

 

(c) Support industry self-regulatory organizations to strengthen capacity development. Support China Shipowners' Association to strengthen sectoral coordination, and organize shipping companies to join forces to overcome the difficulties. Port, maritime and other relevant administrative departments support the shipowners’ association for organizing shipping companies to carry out the measures of storage capacity and etc.

 

B. Strengthen policy guidance and promote transformation and upgrading of the shipping industry

 

(d) Promote specialization and intensive management. Support shipping companies and shipper enterprises to strengthen cooperation and joint ventures. Regulate the investment in domestic shipping industry of the shippers, and optimize the rational allocation of social resources, and guide shippers and shipping companies entered into a long-term cooperation agreement to promote complementary and win-win. Improve marketing access threshold, and increase the domestic coastal inter-provincial transport operators’ minimum size criteria from the 2000 gross tonnage capacity up to 5000 gross tons, and correspondingly increase the minimum capacity standard of inland waterway transport operators. Support shipping corporate mergers and acquisitions, and integration of business resources. Support enterprises to deepen the internal reform and strengthening of institutional innovation, and improve the corporate governance structure, and improve the ability to resist risks. Promote corporate mergers and acquisitions, and develop large-scale, specialized enterprises, and the implementation of "going out" strategy.

 

(e) Develop new economic growth point. Make nurturing and orderly development of cruise shipping, and allow flag of convenience funded multi-point anchored cruise along the coast. Play the policy of Shanghai international shipping center and free trade zone, international tourism in Hainan Island, the advantages of Strait economic zone against Taiwan, and promote the cruise ship finance, ship age, fees and other aspects of policy innovation. Support enterprises to expand into new business areas, and extend business scope relying on container transport molten iron demonstration project. Implement the shipping policy of China (Shanghai) test area of free trade in the overall program to develop shipping finance, insurance, maritime arbitration and other modern shipping services.

 

(f) Promote the development of cross-strait shipping industry. Allow the trunk liner approved to registration of both sides in the north China to Taiwan route to piggyback strait transshipment. Support cruise routes open up four places. At this stage, allow the enterprises of both sides funds and investment and registered both sides approved after to have trial voyage charter cruise in foreign strait transportation; allow foreign cruise approved on international routes to directly anchor the port on both sides, but not as the cross-strait passenger transportation.

 

(g) Promote safe and green development. The application of liquefied natural gas (LNG) in water transportation will be accelerated; LNG powered vessels experimental conversion will be implemented; and exemplary projects of LNG powered vessels in inland waterway will be carried out. Energy saving and emission reduction plans of water transportation will be implemented and vessel efficiency standards will be formulated. Subsidiaries will be replaced by incentives, which will be given to qualified projects of energy saving and emission reduction. Safety rules and regulations will be improved; safety supervision will be strengthened; and emergency response capability will be enhanced. 

 

C. Enhance market supervision and create a favorable environment for development

 

(h) Cancel a number of administrative approval requirements. The administrative approval requirements to be cancelled include reviews for M&A among international shipping/vessel operators, approval requirements for international shipping agency, approval requirements for inland waterway vessel and crew services, designation of commercial/mutual insurance institutions in the coverage of civil liability insurance of oil pollution damage from ships, designation of sites of ship building, repairing and waterborne ship dismantling. More study will be conducted to propose the cancellation of a number of other administrative approval requirements.

 

(i) Enhance supervision of domestic shipping market. Regulation on the Administration of Domestic Water Transport will be carried out in order to gradually improve the integrity management system of domestic shipping enterprises and vessels and the system of alarm and supervision for operational qualifications. The record system of domestic container liner transport will be established in order to keep records of route and freight information. Supervision of operation in domestic shipping market will be enhanced; acts of unfair competition disturbing the market will be punished, focusing on practices of forced agency and fees for domestic vessels by some ports. Industrial associations will be encouraged to conduct self-discipline measures to prevent vicious price competition and maintain price stability.

 

Supervision of Mainland-Taiwan shipping market will be enhanced; record system of container shipping freight for Mainland-Taiwan lines will be improved and acts of unfair competition such as “zero freight” and “negative freight” will be effectively stopped; comprehensive search and supervision functions of Automated Identification System (AIS) for Mainland-Taiwan vessels will be enhanced and more resources will be placed on the investigation of foreign vessels engaging in illegal shipping between the Mainland and Taiwan.

 

(j) Enhance the supervision of international shipping market. Since January 1, 2014, freight for international container liners will adopt the precise filing mode to further regulate the market order. Pool of international container liners, which may violate Regulations on International Ocean Shipping and impair fair competition, will be investigated according to law.
 

(k) Enhance safety supervision. Berthing management of large dry bulk, container and oil ships/tankers of beyond design specifications will be strengthened. Berthing management rules in costal ports will be studied and formulated. Standardization of safe production or safety management system of shipping enterprise will be promoted and regulated to further improve the safety supervision and management. Inspection and supervision of outbound/inbound old foreign vessels will be enhanced.

 

D. Reduce the burden on enterprises and increase their competitiveness

 

(l) Standardize administrative charges. Cancellation and exemption of a number of administrative charges will be carried out. These include vessel certification fee, bilge analysis fee, maritime mediation fee, oil slick recovery fee, costal radio, telegram and telephone fee, review fee for vessel safety inspection application, etc. The standardization of administrative charges will be further studied.

 

(m) Cut and regulate unreasonable service charges. Seven charges including escort fees for over length, capsize, over-draft and special vessels inbound/outbound costal ports, escort fees for vessels inbound/outbound the Yangtze River, escort fee for LGN vessels, sample test fee in container opening inspection, onboard contamination removal fee for international vessels before exiting domestic ports, oil boom setting fee during bunkering operation, and coal physical inspection fee in domestic transportation will be cancelled. The charges for sampling, preparation, testing and supervising loading of solid bulk cargo which may liquefy in water transport will be standardized according to reasonable cost instead of loaded cargo weight.

 

(n) Further standardize the port charges. Study and put forward Policy on adjusting the standard of port operational charge, and perfecting price management mechanism of port. Do a good job in lowering 20% of the pilotage of the vessel of main line of Yangzi River. No port is allowed to conclude an agreement with Liner Company of foreign trade and charge the fees for loading, unloading and dispatch.

 

(o) Standardize the charge of ship trading service institution. Separate the service fee of ship trading and the ship trading price, and change to charging service fee as quota per times and limit the quota. The ship whose asset transfers between a wholly owned company and a holding company of shipping group and involving change in ownership and the ship which is changed in ownership due to annexation and reorganization are free from trade.
   

E. Strengthen measures and promote service quality and standard

 

(p) Strengthen information guiding service. Strengthen dynamic monitoring of shipping market and economic operation analysis on water transport and publish market information such as shipping capacity at regular intervals. Support and guide the intermediary agents to publish the information with regard to freight index, industrial cycle index and etc. Build and perfect honest system of all shipping market and release the honest record of the operator. 
   

(q) Promote service level of port. Further excavate the potential of existing infrastructure by means of wharf transformation, and strength the system construction of collecting and distributing of port. Improve the construction of facilitation and informatization of port. Improve the efficiency of the port service.

 

(r) Promote service level of pilotage. Organize to enforce the project of “Sunshine Pilotage”, enforce sunshine dispatch, rationally provide tug, publish the work procedure and establish a system of recording poor pilotage. Cancel the requirement of compulsory pilotage for the Chinese ocean vessel in and out Taicang port, and combining the upward extending project of the Yangtze Estuary Deepwater Channel, cancel the compulsory pilotage for domestic ship from the sea into the river. 

 

(s) Improve the manner of administrative management. Change the manner of administrative management, and strengthen post supervision after examination and approval of market access. Perfect the management information system of water transportation, and carry out online administrative licensing, filing and license management. Simplify management procedure, and besides the existing cash deposit and business insurance, experimentally implement the NVOCC liability guarantee which is bank guarantee substituting cash deposit. For the Chinese crew on the international navigation ship, implement a passing physical examination, and meanwhile award the two certificates of “Health Examination Certificate of International Travel” and “Crew Health Certificate of Ocean Vessel of the People's Republic of China”.

 

(t) All levels of Transportation Department, Harbors and Fairway Department and Maritime Institution shall pay special attention to the specific implementation of these opinions. All units shall clear the responsible department and person in charge, confirm the work goals and tasks, and strengthen inspection and supervision. All levels of Transportation Department, Harbor and Fairway Department and Maritime Institution shall further transform the function, strengthen service, and combining with actual condition of the department and of the local region, actively study and introduce the policies and measures to improve the transformation, upgrading and healthy development of shipping industry.

 

 

General Office of the Transportation Ministry (seal)
26 August 2013

 

CC: Harbor and Fairway (Navigation, Shipping, Transportation) Bureau (Office) of each Province, Autonomous Regions, Direct-controlled municipality

 

General Office of the Transportation Ministry issued on 27 August 2013

 

Text is from the Transportation Ministry

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