CHINA published a set of guidelines to support and develop its shipping industry yesterday, sending shares in shipping firms such as China COSCO and China Shipping Container Lines Co. higher.

    The world’s biggest trading nation is focusing on the shipping industry as it looks to secure its supply chains.

    China will introduce tax and other regulatory reforms while pushing shipping firms to upgrade and modernize their fleets to build an efficient, safe and environmentally friendly shipping system by 2020, the State Council, China’s Cabinet, said in a statement published on its website.

    “Shipping is a key component in economic development and plays an important role in protecting a country’s maritime rights and economy, in promoting exports and industrial development,” it said.

    The government would also encourage firms to retire vessels early, reduce supply and develop shipping centers like Shanghai and Dalian to compete eventually with the likes of London in shipping services.

    China Shipping’s Shanghai-listed shares closed up 5.02 percent before jumping 9.68 percent in morning trading, while China COSCO, which also lists shares in Shanghai, rose 0.57 percent.

    Barclays analyst Jon Windham said the sector, weighed down by over-capacity after too many ships were ordered before the global financial crisis, was sensitive to any good news even though the government’s announcement lacked details.

    “There’s some potential that there’s going to be some policy support, likely in the form of some tax policy,” he said.

    While foreign firms such as Denmark’s A.P. Moller Maersk have managed to remain profitable by cutting back on costs, China COSCO and China Shipping have suffered heavy losses attributed to the poor trading environment. (SD-Agencies)