More merging shipping lines? Wait and see - Paul French

Paul French

China´s state-owned shipping industry has already seen massive mergers over the past 18 months, and this week the State Council - the country´s highest administrative body - announced more mergers. But China veteran Paul French warns in Splash 247 to read too much into the announcement. Just an announcement does not mean it is a done deal.

Splash247:

The council – China’s de facto cabinet – also urged SOEs to streamline resources and assets via asset restructuring and swaps, and establishing strategic alliances. 

Companies that record losses for three straight years and fail to follow government guidelines risk being liquidated, the State Council warned. 

China’s shipping scene has seen massive contraction in the past 18 months with mergers between Cosco and China Shipping as well as between Sinotrans&CSC and China Merchants Energy Shipping. 

Commenting on the news veteran China watcher and Splash contributor Paul French cautioned as to how firmly the authorities would follow through with their pronouncements. 

“Any move from China’s powerful State Council to reform and restructure the country’s SOEs is welcome. However, we should remember, similar announcements have been made over the last two and half decades and rarely been followed through,” French said.

More in Splash247.

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