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On April 26, the Fourth China Maritime Finance (DFTP) Summit organized by the Administration Committee of Tianjin Dongjiang Free Trade Port (DFTP) was held in Tianjin. Kang Yi, vice mayor of Tianjin attended the summit and gave a welcome speech. Other speakers include the leaders and experts from State Administration of Foreign Exchange (SAFE), China Banking Association, Development Research Center of the State Council, and DFTP Administration Committee, as well as representatives of financial companies, shipping companies etc.
Minsheng Financial Leasing (MFL) as one of the strategic partners of the summit, Zhou Wei, Chairman of MFL, was invited to attend the summit and he delivered a keynote speech titled Jointly Go Forward and Finance Helps the Construction of a Maritime Power. In his speech, he pointed out that maritime finance is an important pillar industry for the construction of a maritime power. With leapfrog development in the past decade, China's maritime finance industry has stood at the historically new starting point. We should more focus on long-term development, remain objective attitude, adhere to the professional and international development road of high-quality, and fully summarize the lessons of previous financial crisis. We should return to the basis, make maritime finance serve the real market demand, which is the root of sustainable and healthy development of the whole industry
Dear friends, ladies and gentlemen,
It is my pleasure to meet all of you including leaders, guests, experts and scholars, new and old friends at the 4th China Maritime Finance (DFTP) Summit. The development of an industry needs a good business environment. With maritime finance as an important starting point, Tianjin Municipal Government designs the function orientation of “One Base, Three Zones”, which is undoubtedly a far-sighted measure. Everyone here today are experts and colleagues of maritime sector. And it is well known that in recent years, the influence of China's maritime finance in both China and overseas has been increasing day by day, which is inseparable from the great supports of Tianjin Municipal Government, especially from DFTP Administrative Committee and other governmental authorities such as the People’s Bank of China, Administration of Exchange Control, CBRC, State Administration of Taxation, General Administration of Customs, and Ministry of Communications etc, as well as from the active efforts of shipbuilding industry and shipping industry. Now, on behalf of China Finance Leasing 30 Forum and Minsheng Financial Leasing, I would like to extend my heartfelt thanks to you for your long-term attention to the development of maritime finance!
As to the today's theme, namely “Reconstruction and Rebalance of Order -- the New Era of Maritime Finance in China”, it is a very professional topic. The evolution of global economic landscape makes the order of global shipping industry, ship manufacturing industry and maritime finance industry face reconstruction and rebalance, and maritime industry in China enters a new era. Therefore, based on the summit theme, I want to share and exchange with all of you how we will work together with the industry colleagues to promote the construction of a maritime power as to the maritime finance industry in the new era.
01 Maritime finance is an important pillar industry of maritime power construction
As is known to all, the global shipping market, after a cliff fall, has entered into a long period of sluggish adjustment phase since the international financial crisis in 2008, and the overall market environment shows an increasingly severe situation. But at the same time, the shipping industry in China is going against the trend, continuously improves its position and influence in the industry globally, which has become a veritably big shipping nation and is accelerating to a shipping power.
As of now, China's marine fleet capacity is close to 250 million tons, ranking second in the world. In addition to the own efforts of the industry, I think that it is due to the steady development of China's economy and the deepening of opening-up policy. Now, China has become the world's first goods trade power, with international shipping volume accounting for more than a third globally, which establishes the endogenous power and confidence for the sustainable development of shipping industry in China. On the other hand, it is due to the transformation and upgrading, quality improvement and efficiency enhancement of manufacturing industry in China. At present, as the world’s biggest shipbuilding nation, China increasingly improves its comprehensive manufacturing capacity of overall sectors such as green energy-saving and environmental protection ships, high-tech ships and ocean engineering equipments etc, which provides a good equipment support for the structure optimization of shipping industry, and realization of transformation development. Moreover, I would like to emphasize that the booming development of maritime finance industry in China has played a very positive role in promoting the shipping industry and shipbuilding industry to be better and stronger.
The maritime industry is a typical capital-intensive one, with its development closely related to the development of financial industry. After the international financial crisis in 2008, our financial institutions seized the historical opportunity of “retreat from the west to the east” for the global maritime finance pattern so as to realize leap-forward development. With ship leasing industry as an example, China Banking Regulatory Commission (CBRC) amended and released the Measures for the Administration of Financial Leasing Companies in 2007, which restored the vitality of financial leasing industry. The earliest leasing enterprises, especially some bank-backed leasing companies viewed shipping industry as an important business sector, which led the whole ship leasing industry to enter the fast development channel. After a decade development, the leasing companies in China, including Minsheng Financial Leasing, have become a force that can't be underestimated in the internationally maritime finance market, which brand images and comprehensive strengths are widely recognized by the industry internationally.
On the one hand, the rise of Chinese ship financing force has played a positive role in promoting China's shipping industry and shipbuilding industry to the international stage further and enhancing the influence of the industry. On the other hand, Chinese financial institutions respond actively to the call of “serving real economy”, focus limited financial resources on the key sectors of industry transformation and upgrading, which provides effective support for the maritime industry to tackle the financial crisis and achieve steady development.
With Minsheng Financial Leasing as an example, it actively plays the unique function that financial leasing combines “capital financing and practical financing” in the development of ship leasing business, and has done a number of exploration in the aspects of deepening international capacity cooperation and responding to the initiative of the “Belt and Road” based on the mode of “Chinese capital plus Made-in-China”.
In the past decade, Minsheng Financial Leasing totally ordered more than 110 all kinds of high-end ships (including equipment) from Chinese shipbuilding enterprises, with accumulative contract value of over 25 billion Yuan, which number of export equipment and amount account for more than 50%. Among them, the products involved are mainly concentrated in the super-large container ships, jack-up drilling platforms, green energy-saving and environment-friendly oil tankers and bulk carriers and other segment sectors which are clearly proposed to be developed emphatically in the strategy of “Made-in-China 2025”, and the cooperative enterprises are focused on COSCO, CSSC, CSIC, COSCO Shipping Heavy Industry Co., Ltd., CIMC RAFFLES and other key maritime enterprises, which play a positive role in serving the transformation and upgrading of domestic real economy.
Here, I would like to say that Minsheng Financial Leasing, and other financial leasing companies focusing on ship leasing business support domestic shipyards with their most of shipbuilding orders. We, financial leasing companies, will spare no efforts to support Chinese manufacturing enterprises and actively promote them to the international market. In recent years, it can be said that financial leasing plays an irreplaceable role in promoting the development of ship and shipping industries.
02 The trend of Global shipping market development
It is a new requirement for the development of financial institutions in the new era to better serve the real economy, to deepen the integration of production and finance, and to promote the finance based on production and to improve production based on finance. The development of maritime finance should not only focus on the industry fundamentals, but also adapt to the development trend of the industry in future. In the next decade, I believe that there will be some new changes and trends in the global shipping market:
First, in terms of fundamentals, the excess capacity of shipping market will become a new normal. Since the outbreak of financial crisis in 2008, the growth of global shipping volume has continuously been slower than that of shipping capacity in the same period. From the point of subsequent development, the trend of global economic integration is unstoppable, but geopolitical risks occur frequently, major developed countries tighten their monetary policies, and there are still continuous problems in the process of global economic recovery. The recently-started Sino-American trade friction makes the major institutions start to cut down the global economic forecasts of the year 2018, and the growth of global shipping volume is likely to again below that of global economy, which increases more uncertainty for the shipping market that just shows sign of optimism. In addition, with the optimization and upgrading of shipbuilding technologies, continuous shortening of ship production cycle, constantly released new capacity, and unceasing inflow of emerging investment capital, excess capacity will inevitably become a new normal of shipping market. In this situation, industry participants will be very passive if they passively wait for the industry to enter the uplink cycle. Therefore, they must actively implement layout, adjustment and optimization, which also opens up new opportunities for financial institutions in the maritime business development.
Second, from the view of medium- and long-term development, the large-scale and network-oriented trend of shipping industry will become a new normal. As an industry of typical scale economy, the shipping industry, from the development of recent years, accelerates its pace of industry integration, and its organizational structure shows a clearly concentrated trend. More typically, in the container liner market, the top ten liner companies in the market control more than 80% of the global container capacity. Even in the relatively competitive dry bulk and liquid bulk shipping market, there is also a clear trend of integration. Influenced by multiple factors such as many market bodies, much speculative funds and high leverage of enterprise etc, the small- and medium-sized shipping companies can only face elimination or wait for integration in future. And those that can survive in the market and obtain development must be the professional enterprises with scale advantage. On the other hand, the progress of a new generation of information technology will radically change the competitive situation of shipping companies, to a certain extent, also lead to that only the enterprises with a certain scale and technology advantage can emerge as the best ones in the fierce market competition. At present, the internet, IOT (internet of things), big data, cloud computing, artificial intelligence, block chain and other new information technologies are new in the initial stages of development with no prospect of weakening, which will propel the whole shipping industry into a new era of networked development.
03 Construction of a maritime financial power
After decade of leap-forward development, the maritime finance industry in China has been on the new starting point of history. The new era has given the maritime finance industry a new development mission. Focusing on the future, we should keep clear and alert mind, carefully analyze and summarize the experience and lessons of some western financial institutions in the last round of financial crisis to avoid greedy for large-scale, pursuit of rapid development and demand perfection, to keep high vigilance against excessive speculation and for high leverage, to attach great importance to risk management, and to accelerate the upgrading from capital advantage to professional advantage. The lessons learned from the past can guide one in the future. The sustainable and healthy development of China's maritime finance matters the construction of maritime power. Here, I also hope that every colleague of maritime finance can fully play the professional advantages of various types of institutions, work together to focus on long-term development, and keep objective point of view to predict the industry trend, jointly promoting the construction of a maritime financial power to drive the development of maritime industry in China.
First of all, we should adhere to the professional and international development path of high quality. With an open mind, we should embrace the new opportunity, new challenge brought by the new economic structure adjustment and new round of technological change. Centering on the financial demand in the supply-side reform of the industry, we shall support the industry to de-leverage, to reduce costs and to improve weak links by means of financial resources. We should grasp the maritime financial needs of the countries along the “Belt and Road” and combine the natural advantages of “Made-in-China” to create more possibilities for deepening international cooperation on production capacity. At the same time, we shall focus on the new demand of technical progress for the financial industry. On the basis of satisfying the financial demand brought by the technical progress of the industries such as BWMC (Ballast Water Management Convention) and Tier III etc, we actively explore the application of new generation of information technology in the financial field. Through the mode of “maritime shipping plus internet”, we shall more accurately hold the market situation, optimize risk identification and control ability, and strengthen asset management and operation capacity so as to continuously improve the quality of development. In addition, we should follow the development law of maritime finance industry, focus on upgrading the professional and international level, and strengthen the construction of core capacity such as ship asset management to further enhance competitive advantage.
Moreover, we should implement development layout centering on the real market demand. Finance, especially maritime finance, must always serve the real market demand. The biggest lesson for maritime finance in the last financial crisis is that greed has made many financial institutions deviate from their directions. It is the fundamental policy of sustainable and healthy development of the industry to return to the basis and make maritime finance serve the real market demand. The shipping market is a highly-specialized and highly-structured market. There are obvious differences in the operation rules and trend of different market segments such as dry bulk and liquid bulk transportation, container liner, etc. Therefore, the premise for maritime financial institutions to expand their business is to deepen their understanding of the industry, to reject speculative mentality, and to implement layout and development centering on the real market demand. In the asset allocation, maritime financial institutions should select and capture the real market demand, combine the medium- and long-term development strategy, specify the direction and standard of investment and financing, and continuously optimize the asset structure.
Ladies and gentlemen. Under the new era, the development of maritime industry in China will enter a promising strategic development period, which provides a rare historical opportunity for China's maritime financial industry to deepen production-finance cooperation and to improve the quality of development. An excellent enterprise can help itself to succeed, and now it is the time for enterprises to take advantage of this opportunity. Minsheng Financial Leasing is willing to work together with all of you here and jointly make due contribution to building China as a maritime power.