China approves shipping giants' restructuring
"With the approval of the State Council, the China Ocean Shipping (Group) Company (COSCO) and the China Shipping (Group) Company (China Shipping) will be restructured," the State-owned Assets Supervision and Administration Commission said in a one-sentence statement.
The move will improve the competitive edge of major Chinese shipping lines by realizing economies of scale, as the global shipping industry faces a long-term downturn, according to a joint reply to Xinhua's questions from the chairmen of the two companies.
Both COSCO and China Shipping have struggled to be competitive, with overlapping investment, high costs, similar operations and industrial chains, said the reply from COSCO chief Ma Zehua and China Shipping's Xu Lirong.
COSCO has an annual freight volume of over 400 million tonnes, with more than 700 ships whose total deadweight reaches 51 million tonnes. China Shipping has more than 530 ships with 36 million tonnes of deadweight.
Four listed firms under the two groups will have their assets reshuffled to focus on different areas, and the realignment is expected to start next year, according to statements they made after the announcement. ■