China Regulates Cargo Owners’ Investment into Domestic Shipping Industry

Posted by Reading Time: < 1 minute

Nov. 9 – China is tightening regulations on investment by cargo owners into the country’s domestic shipping industry in a bid to avoid excess competition amid the continuing global shipping downturn.

The “Announcement on Further Regulating Cargo Owners’ Investment into Domestic Shipping Industries (MoT Announcement [2011] No.58)” released last month by the Chinese Ministry of Transport (MoT) stressed the following principles:

  • The signing of long-term strategic transportation agreements between large-scale cargo owners and major domestic shipping enterprises shall be actively encouraged
  • A cargo owner with the actual need for a self-owned fleet can establish a joint-venture shipping enterprise with a major domestic shipping company
  • In principle, a cargo owner can only establish one joint-venture shipping enterprise and the domestic shipping enterprise shall be the major shareholder
  • The shipping capacity of the jointly-invested company shall be under control through the coordination of China Ship Owners’ Association, especially when the domestic shipping capacity exceeds the market demand

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China. For advice, please email, visit, or download the firm’s brochure here.

This article is also available on Dezan Shira & Associates’ online business resource library. To view the article, and other regulatory updates, please click here.

Related Reading

Shanghai to Offer Incentives to Shipping-Related Industries

Wholly Foreign-owned Shipping Companies to See Relaxed Market Access

Ship Financing Industry Booming in China