Ship Financing Industry Booming in China

After China's ship manufacturing industry experienced a downturn following the World Financial Crisis in 2008, Beijing issued the "Plan of Adjusting and Revitalizing the Ship Industry" in 2009 aimed at "increasing the issuance of loans to ship buyers from financial institutes."

More and more international ship buyers are starting to seek financing in China, thanks in large part to the Chinese government's encouragement of domestic banks to issue new ship loans.

According to recent reports, Chinese banks have provided several billion dollars of loans to western ship buyers since September 2008 and loans for ship financing purposes have increased by roughly 10 percent over the past few years. Specialists speculate that ship financing will soon turn into an emerging field where Chinese bank loans flow; especially if the government continues to put limits on housing loans in an effort to prevent the suspected real estate bubble from expanding.
Foreign invested banks are also eyeing the huge profit of China's ship financing market. According to a recent report on China's loan8.cn, an increasing number of foreign invested banks are straying away from general finance and are seeking business in specific fields, with ship financing being one of them. In 2009, Swedbank and Norges Bank both established branch offices in Shanghai with specific focus placed on the ship financing business. Norges Bank is even the first fully licensed ship financing bank in China.