China frees up cabotage market

In-Depth 1 Jun 2015 by WCN Editorial

China’s Ministry of Transport (MoT) has taken further, albeit limited steps to liberalise the country’s tightly restricted cabotage laws.

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It means that Chinese companies deploying foreign flagged ships will now be able to carry containers to/from all ports located in the country’s free trade zones. Previously, this privilege only applied to Shanghai.

An MoT announcement read: “Chinese-owned carriers registered in the country can ship international cargoes between ports in the free trade zones and other Chinese ports with their wholly owned or controlled vessels flagged abroad, after reporting them to the transport ministry.”

In all, six additional ports will be able to accept foreign flagged coastal ships. These are Chiwan, Haicang (Xiamen), Jiangyin (Fujian province), Mawan (Shenzhen), Shekou and Tianjin.

With new free trade zones located in Guangdong, Fujian and Tianjin, it is hoped that the new cabotage law will boost investment levels in these areas, while generating more shortsea and feeder traffic for the ports.

The new legislation does not allow foreign-controlled liner shipping companies to offer domestic or local feeder services for international cargo in China, something the industry has been campaigning for, for many years. It is one reason why ocean carriers call at so many ports in China and why regional hubs have not emerged in the country.

China is not unusual in this respect, with many countries, including the US, restricting their coast trade to domestic carriers.

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This complete item is approximately 250 words in length, and appeared in the June 2015 issue of WorldCargo News, on page 13. To access this issue download the PDF here.