Chinese Shipyards Could Invest in European Counterparts
Analysts say that this is the ideal time, for Chinese shipyards to invest in their European counterparts, as a way of raising their design capabilities and meeting the challenges; of increasingly strict environmental regulations. It is believed that stronger ship design competence, would help the Chinese shipyards address the challenges posed by growing levels of environmental regulation, being imposed on the global industry.
Some Chinese companies have made moves to invest in European shipyards, which are struggling financially. Industry analysts and observers are reporting that many European shipping operators are struggling financially at the moment, which sharply reduces their market values, making them vulnerable to takeover; as well as open to investment offers.
Because of the high price of oil, fuel costs currently account for some 80 percent of the costs of container operators. Chinese yards should consider buying or teaming up with European yards to strengthen their competitiveness. Industry experts suggest that the latest technology can reduce fuel costs by up to 20 percent, providing shipping companies with much-needed savings.
In 2010, Cosco, the global shipping giant, which happens to be owned by the Chinese government, signed a deal with the Greek government, that allowed Cosco to lease half the shipping port of Piraeus. Since then the volume of cargo is more than three times the level it was at when they took over. The deal cost Cosco 500 million euros at the time, but it looks as though it is paying off for both sides. They are already working on building a second pier in anticipation for increased volume as Greece’s economy steadily recovers over time. The other half of the shipping port is still run by Greece, and lags well behind the Cosco-run operation.
If all continues to go as planned, Cosco has designs on owning the whole port, if Greece ever decides to sell or lease the whole port; in the future. In the shipping port business, location is everything and the port of Piraeus in Greece, is one of the most desired gateway locations to Southern Europe; and the Balkans. It seems China has got one foot in the door and could eventually take the port over completely, when the opportunity presents itself.
Goldman Sachs, an American multinational bulge bracket investment banking firm that engages in global investment banking, has identified four prospering countries that they predict will drive global growth over the next decade; alongside the so-called Bric nations of Brazil, Russia, India and China.