Mergers could mop up excess shipbuilding capacity

Authorities are studying measures to encourage mergers and acquisitions in the shipbuilding industry to alleviate excess capacity, according to a Friday article in the National Business Daily.

The article cited an unnamed source in the Ministry of Industry and Information Technology.

Chinese companies produced about 80.1 million deadweight tons of shipping capacity in 2012. Deadweight refers to the amount of cargo a ship can carry.

But the shipbuilding industry’s utilization rate - a measure of efficiency - was only 75 percent, the newspaper reported.

The ministry and related government departments are working on a guideline to deal with the industrial oversupply while helping companies become stronger.

A number of leading domestic shipbuilders are shifting their core business into high-end maritime engineering.