China may unveil fresh steps to support the shipbuilding and aerospace industries, the state-run China Securities Journal reported Monday, citing unnamed people familiar with the matter.
The government will likely extend preferential tax and credit policies to key domestic ship builders and makers of aircraft engines, the report said, without providing further details. A possible time frame for the measures wasn’t mentioned.
Chinese ministries are drawing up plans to stimulate the two sectors following studies led by high-level government officials late last year, including State Councilor Ma Kai, Miao Wei, head of the Ministry of Industry and Information Technology and Wang Yong, director of the State-owned Assets Supervision and Administration Commission, the report said.
Chinese ship builders have been grappling with weak demand and overcapacity, hurt by Europe’s debt woes in recent years, with orders and prices dropping sharply.
While the global economy is likely to bottom out this year, excess capacity will continue to weigh on ship builders, the report said. “It’s likely that 50% of Chinese ship builders will go bankrupt within two to three years,” the report cited an unnamed official as saying.
The report also said that hundreds of billions of yuan are needed for China to develop aircraft engines that can eventually rival foreign makers of big planes.
Newspaper website: http://www.cs.com.cn
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(c) 2013 Dow Jones & Company
Image: (c) Shutterstock/yui
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