Introduction to Pilot Demonstration Areas for Ship Export Transformation and Upgrading in Putuo District
The Putuo District belongs to Zhoushan City, Zhejiang Province, and lies in the northeast of Zhejiang Province, southeast of Zhoushan Islands, with a total area of 6,728 square kilometers, of which sea area of 6269.4 square kilometers, and land area of 458.6 square kilometers, and total shoreline of 831.43 km. The Putuo District is in the marine monsoon climate area on the southern edge of the northern subtropical zone, featuring mild and humid all year round, sunny in winter and cool in summer. The district has abundant natural resources, developed fisheries, and excellent port. The Shenjiamen fishing port is one of the world's three major non-graded fishing ports, and the Buddhist shrine of Putuo Mountain is situated in the Putuo District.
Key Industry Situation
The economy in Putuo District consists mainly of four industrial systems: port industry, port logistics, marine tourism and modern (offshore) fishery, which is typical structure of export-oriented marine and island economy. The 2015 GDP was RMB35.2 billion Yuan, and the proportion of the three industries was 12.6: 36.6: 50.8. The port industry is an important part of national economy in Putuo District, mainly of shipbuilding industries, also the main product of foreign trade of Putuo. The district-wide shipbuilding industrial output value was RMB32 billion Yuan in 2015, accounting for 53% of the total manufacturing industry output.
However, since the international financial crisis, the industry environment has been seriously deteriorated due to the sustained depression and excess capacity of international shipping market. Meanwhile, the manufacturing return in Japan and South Korea has also brought tremendous shock to the development of shipbuilding enterprise in the district. Faced with the difficulties, the whole district goes all out in promoting transformation and upgrading of shipbuilding industry, and reversing the declining trend in exports. In the years of 2013~2015, the foreign trade exports showed overall upward trend, in which the contribution to the city's export growth increased year after year. The proportion in the city's total exports rose to 63.9%in 2015, and the share in the provincial export remained stable.
In 2016, upon joint review by the Provincial Department of Commerce and the Provincial Department of Finance, the Ship Export Transformation and Upgrading Pilot Demonstration Area of Putuo District was formally approved, which is more conducive to faster transformation and upgrading of ship export in Putuo District, and promotes the export-oriented economy development of Putuo District, and facilitates the Putuo District in growing from foreign trade big zone to foreign trade powerful zone.
Advantages in Transformation and Upgrading of Ship Export Trade, and its Development Situations
National development strategies and policy advantages: On June 30, 2011, the State Council officially approved the establishment of Zhejiang Zhoushan Islands New Area. The industrial layout planning of the new area is focused on the development of marine engineering equipment and shipbuilding industries. On April 19, 2016, the State Council officially approved the establishment of China Zhoushan Jianghai Intermodal Service Center, which brings greater policy and market advantages for the future transformation and upgrading of the shipbuilding industry and further healthy and sustainable development.
Innovation Advantage of Foreign Trade Mode: The advantages of cross-border e-business supplier further grow. The policies of the Implementation Opinions on Accelerating the Development of E-business and the Support Policies Promoting the Development of E-business Industry (Trial) were introduced in 2014, and two e-business parks were constructed including the International Aquatic City E-business Industry Park and the inland port logistics park. In 2015, the district-wide online retail sales was RMB5.16 billion Yuan, and the network consumption reached nearly RMB3 billion Yuan; the comprehensive service system for foreign trade is developed. In 2015, the Putuo District registered 16 local enterprises offering comprehensive services related to foreign trade, and more than 60 enterprises residing in Zhoushan and offering services covering domestic and international ship and maritime comprehensive services; the new mode of "market purchase” was effectively explored. In 2015, four companies realized export value of US$ 480 million through the pattern of "market purchase", driving the district-wide export to grow by 12%; the traditional marketing mode has been effectively innovated. The independently-developed ship models attracted many shipowners to place orders, and positive results are achieved by creating finance lease platform. In 2015, the quantity of new orders grows by 12% through independently developed ship models.
Shipbuilding industry cluster and export scale advantages: in 2011, Zhoushan City was recognized as the first batch of national ship export bases by the Ministry of Commerce, and the Ministry of Industry and Information Technology. Putuo District has become one of the important ship production and export regions, with regional industrial scale ranking No.1 in the province and top 10 in China. It owns 12 shipbuilding enterprises at and above designated scale, total dock capacity of 2.28 million dwt, and berth capacity of 400,000 dwt; annual shipbuilding capacity of 4.8 million dwt, annual ship repair capacity of 80 million dwt; and about 50,000 employees. In 2015, the shipbuilding industry output value was RMB30.6 billion Yuan, of which RMB6.8 billion Yuan of ship repair output value. The shipbuilding capacity is 1.83 million dwt, accounting for 4.7% of the national capacity. The regional export scale ranks No.1 in the province and top 15 in China. In 2015, the area exported 51 ships, with total exports of US$ 1.315 billion. The foreign trade export scale of ship repair of the area ranks 1st among the same ports throughout the country.
International competitive advantage: Actively organize enterprises to participate in the Greek Maritime, Hamburg Maritime, Singapore Maritime and China Maritime in Shanghai. In 2014, COSCO Shipping, Ouhua Shipbuilding and Yangfan Group have entered the MIIT Shipbuilding White List and the finalists of top 20 in national shipbuilding industry. In 2016, the orders held by Yangfan Group ranked No.6 in the world, and the orders held by Ouhua Shipbuilding related to 60 ships, ranking No.17 in the country according to the global Clarkson data. The overall strength and the foreign trade export of the ship repair industry ranked the forefront in the domestic. The IMC-Yong Yue, the Xinya Shipyard, and the Longshan Shipyard rank top 10 in the country’s ship repair industry.
Ship manufacturing technology and R&D strengths: Zhoushan has 15 specialized ship design and research institutes, including 1 national research institutions, 6 provincial research institutions, more than 1,200 professional R&D staff. The 3 shipbuilders including Yangfan, Ouhua and COSCO are established with ship design and research institutes, provincial enterprise technology center, provincial key enterprises research institute, provincial high-tech R&D center, and provincial industrial design center, which enable the whole process of class-A ship research and design capability from basic design, detail design to production design, and provide enterprises with comprehensive technical support.
Product advantages and product differentiation and dislocation development advantages: On the basis of maintaining the three major mainstream ship types e.g. traditional bulk carrier, oil tanker, and container ship, new ship products are added including PSV marine support vessel, 152K shuttle tanker, 111K product tanker, EAS tanker bow half-block, motor multi-purpose vessels, special vessels and other ships of high added-values, accounting for 10.3% of total exports of ships. To avoid the homogeneous competition, the shipbuilding enterprises play their respective advantages, and implement the product differentiation and dislocation development according to market demand. Ouhua shipbuilder mainly produced environmental protection and energy-saving container ships and multi-purpose and special vessels. The Yangfan Group focuses on the manufacturing of chemical tankers, ro-ro ships and energy-saving/economical ship. The COSCO Shipyard mainly manufactures the marine engineering equipment.
Independent brand development advantages: through the introduction of relevant support policies and matching funds, encourage foreign trade enterprises to expand the market by brand building, encourage application of provincial and municipal export famous brand, and form a set of system and mechanism for cultivating provincial and municipal famous brands including database of enterprise independent brand, support policies for cultivating export famous brands, and enterprise application and assessment. By the end of 2015, the whole area had had 3 provincial export famous brands, and 9 municipal export famous brands.
Organizational management and service system advantages: the district government sets up a leading group for the transformation and upgrading, organizes and leads the enterprises in transformation and upgrading work; sets up the shipbuilding enterprise industry association, implements the industry self-development, self-management, self-service; establishes shipbuilding industry export monitoring system and industrial early warning mechanism; initially constructs the public services system framework and supporting facilities, including design and development, inspection and testing, ship trading, ship information, training institution, logistics and distribution, financing and leasing, freight forwarding, and shipping agent.
Foreign trade transformation and upgrading facilities
Ship export trading platform: The Zhejiang Shipping Exchange Co., Ltd. is a service enterprise offering trading places and information for ship customers, holding by the Zhoushan Port Holdings State-owned Assets Management Co., Ltd., and jointly invested together with four units; actively guide the ship export enterprises of Putuo District in docking with it, and maintain the smooth information flow and operational development.
Ship exports display platform: Build the platform displaying the shipping industry development history and the platform displaying export ship at the Zhoushan International Aquatic Product City. The three companies namely Yangfan, Ouhua and COSCO have built their respective platforms displaying leading ships of enterprise within themselves.
Quality inspection platform for ship export: Lloyd's Register, Germanischer Lloyd, BV, NK, China Classification Society and other internationally recognized classification societies have set up offices in Zhoushan and Putuo. The Shanghai Marine Engineering Quality Inspection Co., Ltd. to be introduced in priority in the near future will set up branch in Zhoushan, and supported with its two basic platforms namely the China Shipbuilding Industry NDT Center and the National Defense NDT Personnel Identification Test Center, provide inspection testing and training and examination services to shipbuilding enterprises of Putuo.
Public service platform for ship export training: the Zhejiang M&E products export base (ship) training public service platform was established by the Zhejiang International Maritime College. The platform carries out training services mainly in shipbuilding knowledge, maritime legal basis, ship quality testing, maintenance electrician, CAD training, ship electrician, and ship fitter.
Public Service Platform on Ship Export Information: The information platform is hosted by the municipal relevant departments, constructed and operated by the Zhoushan Chuanlian Ship Information Services Co., Ltd., construction and operation, and co-constructed by the shipbuilding enterprises. It provides ship trading guidelines, international shipowner service, industry information update, information system development, ship information technology and other services. The Chinese Academy of Sciences and the China Shipbuilding Economy Research Center provide information and technical support to the Putuo shipbuilding enterprises.
Support Policies for the Transformation and Upgrading of Foreign Trade
The Putuo District being the shipbuilding industry strong area, also gradually introduced a series of policies and measures including the A Number of Opinions of Zhoushan Putuo District People's Government on Further Accelerating Development of Shipbuilding Industry, Interim Provisions on Safety Management of Shipbuilding Outsourcing Enterprise in Putuo District, Zhoushan and A Number of Opinions of Zhoushan Putuo District People's Government on Further Accelerating Development of Marine Equipment Industry; carried out a number of research topics including How to Accelerate the Construction of Key Projects and Promote the Sustained &Rapid Economic and Social Development; and set up the Putuo District Shipbuilding Industry Development Office, Putuo District Ship Industry Association and other management and coordination mechanism, and formed into all-oriented ship industry development aid mechanism including government support, bank assistance, corporate self-help, and social involvement. Especially in 2013, the A Number of Opinions On Further Accelerating The Transformation And Upgrading of the Industrial Economy released by the CPC District Committee and the district government (Pu Wei  No. 11) listed the "enhancing the development of traditional dominant industries, and strengthen the shipbuilding industry" as development priority and support direction, and made clear that from 2013 onwards, the district government arrange fund of not less than RMB50 million Yuan per year for industrial transformation and upgrading to support the stable and healthy development and transformation and upgrading of industrial economy, and will gradually increase according to the district financial situation. By the end of 2015, a total of more than RMB60 million Yuan of funds had been arranged to support the shipbuilding industry.