By Mr Yan Hai
In recent weeks the news has been filled with concerns about the Chinese economy. But, whatever the fortunes of the Chinese economy, there are still a significant number of owners based in China, with a combined fleet of 124.8m GT at the start of September 2015. So, where are these owners based within China and why are they located in particular areas?
Location, Location, Location
The data on the main graph shows the combined fleet of shipowners with a head office located in each â€˜zoneâ€™ or â€˜clusterâ€™, defined as areas within a 40km radius around major cities (although Shenzhen and Hong Kong have been considered separately). Perhaps unsurprisingly, the â€˜zoneâ€™ in mainland China home to the most tonnage is Shanghai, where companies owning a total of 31.1m GT are based. Of this volume, 29.7m GT is owned by Chinese companies, equal to 24% of the total Chinese owned fleet. Ranked second is the Guangzhou â€˜zoneâ€™, where owners with 9.5m GT are based. Whilst most Chinese owners are located on the mainland, Chinese companies with a total fleet of 27.0m GT are based in Hong Kong and Singapore.
A Good Part Of Town
While the fleet owned by companies based in Shanghai clearly dwarfs that of other â€˜zonesâ€™, these areas can also be grouped into broader â€˜regionsâ€™. For example, the Shanghai, Nanjing and Ningbo â€˜zonesâ€™ are all located within the Yangtze River Delta region. The combined fleet of owners based in this grouping totals 38.0m GT, around a third of the total Chinese owned fleet. The attraction of Shanghai and the surrounding areas may be due to historical ties, the large port and access to commercial institutions. Meanwhile, the Pearl River Delta region was and still is at the forefront of Chinese manufacturing and competes against Hong Kong for Chinese traffic. A fleet of 12.9m GT is owned by companies based in the zones in this region. Elsewhere, a fleet of 22.7m GT is owned by companies based in the zones in the Bohai region, perhaps reflecting the location of a number of key ports and industries in the region, as well as the government presence in the capital city, Beijing.
An Up And Coming Place?
In the last decade, the prominent growth centres of Chinese fleet ownership have been the Pearl and Yangtze River Delta regions, with the fleet owned by companies based in these regions growing by a CAGR of 10.7% and 10.3% respectively. Currently, owners in the Pearl River Delta have 1.6m GT on order (equivalent to 13% of the fleet). However, the orderbooks of owners based in the Bohai and Yangtze River Delta regions are notably larger, accounting for 32% and 23% of the regional fleets respectively, and these areas seem set to drive a greater proportion of growth in Chinese fleet ownership in the short-term.
Evidently, Chinese owners are located in a range of â€˜zonesâ€™. The maritime hub of Shanghai is most significant, but broader regional groupings are also clear. Owners locate in various places for a range of reasons, but they do seem to like to stick together, and keep near ports and major cities. It seems that for shipowners, like those house hunting, location is key.