China sets sailing

There was a time when we talk of Greek tycoons, it would always invariably be a shipping magnate. Greece was known world over for building ships. And it came as a surprise to know that it continue to remain a ship making giant only difference being that all financing and orders have moved to China due to what else, cheap finance and lower shipyard costs!

16% of the world's fleet of dry-bulk and container vessels, and approximately a quarter of all oil tankers is operated by Greece. And despite a major slowdown in the sector, they have not lost its market share the market share to Germany, Japan or the Scandanavian countries due to the shift of manufacturing and financing to China. As of the end of September this year, Greek shipowners had ordered 188 vessels from Chinese yards, compared with 217 from Korea. Japan is a distant third with 39 ships ordered. In bulk carriers, Greek shippers ordered 46 such ships from China v/s 13 Korean orders.

Korean yards still have the upper hand in building specialized vessels like liquefied natural-gas carriers and offshore oil-drill ships but the Chinese are fast catching up. China's shipyards offer prices on average 10% lower than South Korea and 15% lower than Japan. But this cheap buying by the Greek has led to a glut in the sector – there are currently 35% container vessels more than needed while the overcapacity of crude tanker and bulk carrier is around 28 to 25%. Somehow, our own experience of this frenzied buying of cheap Chinese goods, talks of the same experience. Yes, the Chinese are everywhere, anywhere where there is a gap, they make their way into it and become the dominant player.