The Effect of “White List”of Shipbuilding Enterprises

Reporter Yang Peiju

On September 3, 2014, the list of enterprises(first batch) of standardconditions of shipbuilding industry, which has drawn great attention and long-awaited by the industry was finally released. With its formal publication, its potential ripple effects are graduallybecoming apparent.

Seen from insiders, ship enterprises which can be listed into“the condition” is just like being listed into the “white list”, which will undoubtedly bring positive energy to the enterprises’ development in the future. Conversely, those enterprises which are excluded from this list will surely have more difficulties in its future business.

At present, after self regulation of the shipbuilding market and the promotion of the “Standard Conditions of Shipbuilding Industry”, some shipbuilding enterprises have stood out from the downturn market, and their competitive advantages are more obvious. Chinese shipbuilding market has also shown the two-eight phenomenon -which means that 20% of the enterprises are having 80% ship orders. According to this statistics,the majority of medium and small-sized ship enterprises are still in difficult situation.

Once in a while, a cargo ship of thousands of tons can be built by just renting a beach, buying a pile of scraped steel, hiring a group of migrant workers, and working for half a year. However, when the shipping market got into downturn in 2008, a series of problems such as being difficult to deliver ships, to obtain orders and to financing were experienced in succession, making the shipyards suffer indescribable pains. At the same time,with the international community putting more and more attention on environmental protection, safety and health of life and social responsibility, when reflected on ships,the competition would be on environment-friendliness,economy, effectiveness and technical advancement. The shipbuilding industry has entered an era of brand and quality.

After the baptism of financial crisis in 2008 and the suffering of sluggish ship market, Chinese shipbuilding industry profoundly realized that it must pay more attention to quality and brand if it wanted to be a true shipbuilding power. Therefore, Chinese shipbuilding industry, after deep reflection, and a series of measures to increase research and development efforts and quality control, a large number of outstanding ship types appear and are favored by the market.

Judging from the 51 enterprises included in the list,there are not only enterprises under north and south shipbuilding groups, but also some enterprises under government-owned enterprises such as COSCO, China Shipping, CSIC etc. In addition, a batch of famous private shipbuilding enterprises such as Rongsheng heavy industries, new times shipbuilding, Pacific,Shuntian shipbuilding, Jinhai heavy industry and etc. are also included in the list. Most of these listed enterprises have good performance and also have good prospected development in the future. In the first seven months of this year, three enterprises i.e. Jiangsu Yangzijiang shipbuilding factory, HudongZhonghua shipbuilding,Shanghai Waigaoqiao Shipbuilding Enterprises have entered the world’s top ten, which shows the strong power of Chinese shipbuilding industry. We can believe that in the future ship market where most shipbuilding enterprises pay more attention to quality and brand, this ranking will be rewritten at any time.

Another point is that after publication of the list, it’s inevitable that its subsequent effect would continuously ferment. According to Chen Yingtao, researcher of the Ship Equipment Department of the Ministry of Industry and Information Technology, the condition will not directly link with policy, but will guide the resources of the central government, local government, and the society towards standard enterprises. The condition adopted recommended standard, although it is not mandatory administrative license, it may become the fundamental basis for policy support in the future.

Secondly, there would be more ship enterprises to participate in the application or gradually improve themselves according to the conditions. Chen Lixin,Deputy Secretary General of the Industry Association of Zhejiang CANSI said, judging from the view of the shipbuilding enterprises in Zhejiang area about the conditions, basically, the view is very positive. As regards the concern expressed by some people that it would be very difficult for those small and medium-sized shipyards excluded by the white list, she believes that it is not necessary to worry about too much. Because ship yards of different levels face different customer groups, the shipyards excluded from the “white list” may not close down. These shipyards have their own rules of survival.But seen in the long run, entering the "white list" is the general trend, therefore, standardization will be the road for shipbuilding enterprises to become prosperous.