Chinese Law | China: Vol.2, No.06

CHINA MARITIME LAW NEWSLETTER

Vol. 2, No.6 - July 17, 2002

TOPICS THIS ISSUE:

Shanghai Port 1st Half Cargo Increases 17.2% to 125 Million Tons
Chinese Banks Show Shanghai the Money
Foreign-funded Company Approved to Take Holdings of Chinese Pier
LPG Tanker on Auction in China Court Dispute
Coscon Launches New Northeast Asia Route

Shanghai Port 1st Half Cargo Increases 17.2% to 125 Million Tons

China's eastern port of Shanghai recorded a 17.2% year-on-year increase in cargo to 125 million metric tons in the first six months of 2002, official media reported. The cargo included a 30.9% year-on-year increase to around 4 million cargo containers during the same period. Shipping companies added 22 container lines linking Shanghai to other cities from January to June of this year. A total of 1,170 container vessels arrive and depart Shanghai every month and the increase in cargo and shipping links reflected Shanghai's rising status as an international shipping center and its position as the world's third largest port and fifth largest container port in 2001.

(Source: Dowjones.com)

Chinese Banks Show Shanghai the Money

Ten Chinese banks have turned on a 17bn RMB (US$2.05bn) credit tap for construction of Shanghai's Yangshan Deep-Water Port. Now that the capital has been raised and procedural and technical issues are solved, the project is ready to start. Construction is now expected to start before the end of July 2002. The two-decade project calls for the construction of 33 deep-water berths on Xiao-yangshan Island in Hangzhou Bay, which sits 27.5 km from the city's southern coast. No final budget has been announced for the full project, but the first phase to be completed by 2005 will cost 14.31bn RMB (US$1.75bn). The named domestic banks in the credit line include China Construction Bank, the State Development Bank, Bank of China, the Industrial and Commercial Bank of China, and the Shanghai Pudong Development Bank.

(Source: Maritimeasia.com)

Foreign-funded Company Approved to Take Holdings of Chinese Pier

The ban that allowed no foreign-funded companies to take holdings of Chinese wharves was lifted for the first time by the Huijian Wharf Co. Ltd. of Xiangyu Bonded Area in Xiamen (Amoy), Fujian Province.

The company succeeded in getting approval from the Ministry of Communications, which held that the Huijian Holding Co. was permitted to engage in loading and unloading, warehouse and transit businesses for ocean-shipping containers at the wharf. The company is the first holding company from among all foreign-funded companies, which has been approved by the state department concerned to engage in the port business after the implementation of the "Master List for Foreign Investment Industries", which was published by the State Planning Commission, Foreign Trade and Economic Commission and Ministry of Foreign Trade and Economic Cooperation. The company was set up with the Fujian Xiangyu Group Co. Ltd as 40 percent owners of the investment and the rest being taken up by other three companies registered in Hong Kong.

The previous law stipulated that foreign investment in the construction and operation of public piers along the coastal harbors of China's mainland should not exceed 50 percent of the total shares, nor should it be a shareholding company.

After China's entry into the WTO, investment in the construction and operation of domestic harbors and wharves must be opened to foreign companies. Under these circumstances, the state department concerned stipulated that starting from April 1 2002, foreign companies would be encouraged to invest capital in the facility construction and operation of public piers along the coastal harbors of China's mainland and that it would no longer be necessary for the Chinese side to be a shareholding company.

The Huijian Wharf is located by the No.13 and 14 berths in the Dongdu Port area of the Xiangshan Bonded Area. Industry experts think that the approval by the Ministry of Communications for Huijian Wharf to be held by foreign capital is a signal by the Chinese government encouraging foreign capital to invest in China's port construction.

Port construction in China is somewhat lagging behind, but there are a lot of business opportunities. The introduction of the policy will greatly rouse the enthusiasm of foreign investment in China's port construction, thereby speeding up the pace of modernization in China's port construction. In this aspect, the Port of Xiamen has cut a figure in the nationwide introduction of foreign capital for port construction.

(Source: People's Daily Online)

LPG Tanker on Auction in China Court Dispute

A brand new LPG tanker will be sold off by the Ningo Maritime court. Minmetals Shipping and Forwarding filed a suit against Hainan Longzhu Shipping over a ship leasing deposit, according to the announcement placed by the court. The pressure type steel tank vessel was built in 1999 by Shanghai Jiangnan Shipyard. The 2420 dwt ship has two 1000 cbm tanks. It was originally registered with St. Vincent and Grenadines but in August 2001 it was re-flagged under the Chinese national flag.

Applications for auction bids are due by July 25 and claims are due by the end of August. Founded in 1950, mainland based state enterprise Minmetals has long been responsible for the import and export of metal and mineral products. Hainan Longzhu Shipping is a single-ship company based on the southern island province of Hainan.

(Source: maritimeasia.com)

Coscon Launches New Northeast Asia Route

Starting from the third week in July, COSCO Container Lines (COSCON) will launch a new service linking Tokyo to Qingdao in northern China and Shanghai, using space on its PSW-3's westbound leg. CONSCON previously covered the Tokyo/Qingdao/Shanghai route through its Asia/US East Coast (AUM) service but the AUM will discontinue calling at Tokyo as from July 10. The PSW-3 is a joint operation with K Line deploying five 3,500 teu vessels. The first PSW-3 vessel for the new service will be the Concord Bridge, arriving at Tokyo on July 20. Just last week COSCON launched its Yokohama/Dalian service, using slots on its present Yokohama-Tokyo-Nagoya/Xingang-Dalian-Yingkou service together with those on the westbound leg of its North America service. The fixed-day weekly service is being operated between Yokohama on Mondays and Tuesdays and Dalian on Saturdays and Sundays.

(Source: Asia Maritime Today)

The China MARITIME Law Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.