The two days’ Shipping China conference focused and examined the role of China in global shipping industry’s recovery. Specialists from many sectors of maritime business have attended this event.

Session One – Brokers Viewpoint

A panel of top brokers who are operating in and with China market explored the latest deals and opportunities, and provided valuable insight on what to expect in the coming year.

“China has been the major contributor to the global seaborne transportation over 10 years, and technically takes up 40% of the world’s ship building capacity… LNG capacity is likely to surpass the demand in 2016.”

---- Denis Petropoulos, the Executive Director of Braemar Shipping Services & the Managing Director of Braemar Seascope.

“Conflict between international shipping practice and Chinese old planned economy regime is still an existing problem in today’s Chinese ship broking market. There are two kinds of brokers which are physical brokers and paper brokers. Physical brokers are public, not doing the business for profit. We are now making effort to promote ship brokers’ status in China. I am the brokers’ broker.”

----Liu Xunliang, the General Secretary of Shanghai Shipbrokers Association

“There are too many restrictions of shipping finance in China, The entire game will change if Chinese government gives fewer restrictions to shipping finance, allowing more not only to newbuilding but to second-hand vessels. I personally think it is a good time for VLCC, because there will be a shortage of five-year old VLCC capacity. But I am worried about panamax market as it will expand around 20% in 5 years.”

---- George Eliades, the Head of Sale and Purchase of ACM Shipping China

“There are four scenarios in China’s shipbuilding market. First, it is predicted that there will be around 40% of ship yards closed due to the market downturn. Second, many ship yards chose to volunteer to exit. Third, the yards are slowing down to build new vessels. And last is that actually good ship yards are doing very well, still receiving orders and maintaining the quality.”

----Li Sheng, the Managing Director of HIT Marine Company

Session Two – Advances and Challenges in Vessel and Offshore Building in China

This session examined the ever changing fortunes of Chinese shipbuilding, with viewpoints from different classification societies on situations and challenges of China shipbuilding industry.

“China has the massive shipbuilding capacity, with low cost structure and large, young workforce. However, problems still exist such as the limited access to a new green technology and eco-designs, quality issues and high competition among domestic yards.”

---- Taira Narisawa, the Operating Officer and Regional Manager of China ClassNK

“China is now meeting the offshore challenges. With the competitions with Korea and Singapore, China has to build strong engineering capability and industry confidence – to build industry confidence is essential rather than building market share. Overall, China’s offshore business is at full speed already.”

----Richard D. Pride, the Division President & COO of ABS Greater China Division

“The three key elements of a successful industry are: Plant, Process, People. We consider at this time people is essential investment, human resource is important for the industry.”

---- Nicholas Brown, the Greater China Area Manager of Lloyd’s Register

“Key challenges for china to attain operational excellence are the need of heavy plate technology, better planning and pre-outfitting concepts and increased focus on tolerances. However, Chinese shipbuilding has the potential to become the global winner – in volume, in technical superiority and in operational excellence.”

---- Tom Behrens-Sorensen, the Co-Founder of Navisino (Beijing) Partners & the Former Chairman and Group Executive VP of A.P. Moller Maersk Group

Session Three – Keynote

Discussion about implications and prospects for maritime China under the new Government was carried out among specialists from shipping companies.

“High-technical and green productions are the direction of our development. We would like to create value of shipping ‘chain’, as well as brand effect. For the prospects of China’s ship yards, it is likely that some small yards will be shut down in the next 5 years, but I believe the top 20 yards will see a new development chance. Especially the state-owned and big yards that supported by government have done a lot of effort on assets.”

---- Chen Qiang, the Chairman of the Board, Executive Director and CEO of China Rongsheng Heavy Industries

“For China’s maritime industry, to get ahead in the next 10 years companies should watch on the key policy areas, as well as business environment. Building reliability and commitment in China business, ‘Guan Xi’ (Relationship) is essential. In conclusion, think the unthinkable is the key password to get ahead.”

---- Tom Behrens-Sorensen, the Co-Founder of Navisino (Beijing) Partners & the Former Chairman and Group Executive VP of A.P. Moller Maersk Group

“China’s growing impact on global shipping poses both an opportunity and a threat for Western suppliers of shipping services. To ensure that the former and not the latter becomes the reality, there is a need to focus on: the delivery of services which add real value in helping Chinese shipowners to meet increasing regulatory, market and customer challenges in ‘tomorrow’s world’ especially in energy shipping; the transfer of knowledge via BOTS and other models where both parties align to achieve operational excellence; and engendering a business culture that is open, transparent, sustainable and has a preparedness to look at new ideas and new ways of doing things.”

----Bob Bishop, the CEO of V.Ships Ship Management Company

“Trade patterns have changed, especially in Asia. As a global player, we have to stay inflexible. Sustainability is the key driver to China.”

---- Robert Lorenz-Meyer, the Immediate Past President of BIMCO & the Owner and Managing Partner of Ernst Russ

“To do business in China, two elements are essential, Relationship and Patience. We are still young now, still have many things to learn, we should identify confidence and arrogance. If one wants to do business, he should bring real value.”

----Wang Chunlin, the Executive Director of Pacific Basin Shipping

“Five mega trends in China are fundamental. First is the shift from traditional shipping to offshore market. Second is China’s bank support, and my prediction is that the current $100 billion gap existing between finance demand and supply will be filled by China’s banks. The third is that China’s ship yards are learning pretty fast on more complex ship building technology, and today the gap between China’s shipbuilding and foreign countries’ is reduced. The fourth is that more charters are now likely to charter vessels from Chinese companies. And the fifth is that despite that many charter parties are now faced with the cancellation of charter contracts, China is now rebounding.”

---- Geir Sviggum, the Partner of Wikborg Rein

Session Four – Demand and Market Drivers

This session looked at China’s influence over the shipping markets, both as a voracious consumer of raw materials and as rapidly growing force in shipping.

“China will become world’s number one driver of tanker demand, despite of the increasing imports from Russia/Kazakhstan, and the shorter sailing distances with Sino/Myanmar Pipeline. Refinery capacity may arrive ahead of demand, and this will cause poor margins and higher product exports. Iran and Sudan supply may return, but most additional barrels will come from the Atlantic Basin.”

----Henry Curra, the Head of Research of ACM Shipping

“There is no doubt that China will see bright future for gas use, but challenges are: gas prices competing with coal prices and domestic gas price; pipelines in Turkmenistan, Uzbekistan and Russia; shale gas which has higher reserves but also higher costs.”

---- Ralph Leszczynski, the Head of Research of Banchero Costa

“RMB-denominated FFA offers domestic players easier access to the much needed FFA products, and with the corporations with Shanghai Clearing House, Pudong Development Bank, brokers and China based users, it will have a optimistic future.”

---- Jeremy Penn, the CEO of The Baltic Exchange

“In my opinion, most of the medium-sized ship yards will survive. Owners of these yards usually have other investments, even though they go bankrupt, the hardware still exists and can be sold. Small yards mostly started late after the shipping booming in 2003. Even if they are shut down, if the market rebounds, they will recover very quickly. Overall, major ship yards will be secured, and I think at end of the day if many yards are faced with bad time, Chinese government will get involved to support them. Chinese market will be positive.”

---- Hsu Chih-Chien, the President of Eddie Steamship Company & Courage Marine Group

Session Five – Money Speaks Mandarin – Bankrolling the Future of Shipping

A group of specialists from banks and investment company examined Chinese banks developing as industry lenders and viewpoints from European banks.

“Recent policies of European banks are reconstruction, and we are looking for syndicate, to renew some capacity. Referring to the corporation with Chinese banks, we do the same processes as with other banks, there is no difference.”

---- Antoine Gustin, the Managing Director of Export Finance Greater China & the General Manager of Beijing Branch of BNP Paribas China

“There are cultural gaps when you are faced with foreign clients for Chinese banks, relationship building is essential. The shift of global finance centre from Europe to China may not happen to that much degree, as the western has tremendous financial history and shipping is only a part of international economy.”

----Jesper Clausen, the CEO of Panacore Ship Investments

“A significant trend in shipping finance is ‘separation’. We should now refer shipping finance market to two parts – traditional shipping and offshore shipping. Not only China’s banks, other Asian banks such as those in Singapore have taken up a lot of what the Europe did.”

---- Nigel Anton, the Global Head of Shipping Finance Standard Chartered Bank

“It is now difficult even to finance in offshore sector in European banks, while China’s banks are becoming more important. There is a growth of footprints of China’s banks in Europe, but I don’t think the shift of finance center from Europe to China will happen, as I suppose China’s banks will still focus on shipping sector.”

---- Nigel Ward, the Partner of Norton Rose

“More and more banks are now investing on offshore shipping sector, and bankrolls are now flowing out from traditional shipping sector. This will cause an imbalanced risk distribution. .. Fund can shift quickly, but not expertise. You can’t shift expertise in one night, there are a lot more to be learnt.”

---- Wu Hongliang (Derek), the Director of Shipping Division 1 of Transport Finance Department, China Exim Bank

“Leasing for China’s banks is still new, actually many China’s banks wish to do more lending, but it is difficult to transit this wish to reality. I don’t want shipowners to have much expectation, and we should give time to Chinese financial institution. Leasing is not a backup for traditional lending, what we want to do are two things – providing unique production and helping clients to manage their balance sheets. Finally, if you want to enter Chinese market, you should take long-term view and commitment, showing loyalty to this market.”

---- Yang Changkun, the Managing Director of Shipping ICBC Financial Leasing