The Several Opinions of the State Council on Promoting Sound Development of Shipping Industry issued in August 2014 (Guo Fa  No.32) (hereinafter referred to as “Several Opinions”) expressly put forth the general requirement for shipping development. It is to implement reform and innovation in all areas and sections of shipping development, adhere to scientific development, focus on the transformation of development mode, aim at promoting the sound development of shipping industry and building a strong shipping power and center on cultivating international competitiveness, so as to strongly guarantee national economic security and maritime rights and interests and enhance the overall national strength. The “Several Opinions” also determined the objective of China’s sound shipping development - according to the requirement of comprehensively completing the building of a moderately prosperous society, basically establishing a safe, convenient, efficient, green and internationally competitive modern shipping system by 2020, so as to meet the need for national economic security and foreign trade development. This includes the following three points. The first is to ensure economic and social development. Global shipping services shall be continuously expanded, fleet size and port layout shall be planned appropriately ahead of time, transportation capacity for key materials shall be considerably improved, and its comparative advantages in the overall transportation system shall be further displayed. The second is to notably enhance international competitiveness. Export of shipping service trade shall increase notably, import and export shall develop in a balanced way, and the scale of shipping service trade shall rank among the top in the world. Shipping enterprises, port constructors and operators and global logistics providers with rather strong international competitiveness shall be founded, and shipping center with international influence shall be basically completed. The third is to keep raising China’s position in international shipping business.
If efforts are made toward the 2020 objective of sound shipping development put forth in the State Council’s “Several Opinions”, what will China’s shipping industry be like in 2030 after this industry is strongly boosted in recent years and yet another 10 years?
Shanghai International Shipping Institute (SISI) released China Shipping Development Outlook 2030 in March 2015 and put forward the following conclusions regarding China’s shipping development in 2030.
(1) Anticipation of China’s shipping volume in 2030
China’s international shipping volume is expected to reach 6.2 billion tons in 2030, accounting for about 17% of the global total. In dry bulk cargo transportation, the shipping demand for iron ore and coal will increase at a much slower pace while that for grain and oil import will increase rapidly, and international container shipping of import and export will exceed 200 million TEU. China will remain the largest cargo trader in the world and take a dominant role in global container shipping.
Transportation demand along China’s coast will show dramatic changes in 2030 in that shipping of dry bulk cargo will account for a much smaller proportion, while container shipping will take the largest part in coastal transportation. In 2030, China’s coastal shipping volume will reach around 3.3 billion tons, and its coastal container shipping volume 116 million TEU or so, taking up nearly half of China’s total coastal transportation.
China’s shipping demand along the Yangtze River will approach 3.8 billion tons in 2030, making the Yangtze River the main channel of resource distribution in the eastern, central and western regions. Among that, shipping volume of containers and LNG will be increased by four times at least.
(2) Anticipation of China’s shipping development in 2030
China’s international shipping capacity will double in 2030 to account for about 15% of the world total. China will have more shipping fleets than Japan and Germany by 2020, and more than the traditional shipping power Greece by 2030. China’s bulk cargo carriers will continue to expand and take up 70% of fleets, its oil tanker fleet will increase slightly to take up 18%, while the ratio of container fleet will slip slightly to 9.5%. In terms of tonnage increase, bulk cargo carriers and oil tankers will increase slightly faster than the shipping capacity of container in the next 20 years.
China’s coastal fleet will reach the scale of more than 150 million tons in 2030, a significant 60% increase from the current scale. While containerships will be the mainstream vessel type in coastal fleet, dry bulk cargo fleet will shrink considerably and fleet of liquid chemicals will reach the scale of 13.76 million tons.
It is expected that private shipping enterprises will account for over 70% of the total by 2030, with their shipping capacity accounting for over 40%. Large private enterprises will take a leading position in the domestic shipping industry.
It is expected that more China-made strategic materials will be transported by Chinese ships in 2030, so will 60-70% of “China-made oil”.
As shipping enterprises are more aware of modern logistic services, their role will shift from “ocean carrier” to “global logistic service provider”. They will be able to provide customers with quality, efficient, integrated, professional and characteristic logistic services, and logistic value-added services will increase too.
Regarding the development of China’s ship technology, ship energy mix will be diversified in 2030. LNG is very likely to become the top choice as future ship fuel, and biofuel will be gradually adopted. Meanwhile, shore power technology will be more widely used. Unmanned ship will appear in China, polar ship has broad prospects, and China’s LNG fleet will develop with great momentum to reach 100 ships around 2030.
(3) Anticipation of China’s port development in 2030
Cargo throughput at Chinese ports will double to exceed 25 billion tons in 2030, but the cargo mix will change greatly. While the ratio of container cargo will rise from the current 18.6% to 26.8%, the ratio of dry bulk cargo will fall below 50% due to slower shipping growth of coal and iron ore, the slowdown of shipping demand for domestic trade being the main reason.
Container throughput at Chinese ports will reach 505 million TEU in 2030 with an average annual growth rate of about 6%, which is ensured by the fast increase of container shipping along both the coast and inland rivers.
The ranking of China’s top ten ports will change in 2030. In terms of throughput, they may rank in the following order. Ningbo-Zhoushan (1.82 billion tons), Tianjin (1.33 billion tons), Shanghai (1.3 billion tons), Qingdao (1.28 billion tons), Tangshan (1.16 billion tons), Suzhou (1.13 billion tons), Dalian (1.01 billion tons), Rizhao (900 million tons), Guangzhou (860 million tons) and Yingkou (770 million tons). The following ranking is expected in terms of container throughput: Shanghai (52.68 million TEU), Qingdao (43.15 million TEU), Ningbo-Zhoushan (37.27 million TEU), Tianjin (32.3 million TEU), Shenzhen (30.24 million TEU), Guangzhou (30.07 million TEU), Dalian (27.86 million TEU), Suzhou (23.11 million TEU), Lianyungang (16.67 million TEU) and Xiamen (13.24 million TEU).
Seven port clusters will be formed on China’s coast in 2030, namely the port cluster in east Liaoning province, Tianjin-Hebei port cluster, port clusters in the Shandong peninsula and north Jiangsu province, port cluster in the Yangtze River Delta, southeast coast port cluster, and the port clusters in the Pearl River Delta and southwest coast. Three or four super container hub ports will be formed, including Shanghai, Qingdao and Hong Kong. More than 95% of coastal ports will integrate resources with other ports in the cluster in the form of capital injection, strategic cooperation, etc.
Four hub ports will be formed along the Yangtze River, namely Chongqing, Wuhan, Nanjing and Suzhou.
In 2030, a coal unloading port network will be formed in south China with Ningbo-Zhoushan and Guangzhou as transshipment centers and Putian and Qinzhou as operating points. In north China, Hebei, Tianjin, Qingdao, Rizhao and Lianyungang will remain the main coal loading ports.
In 2030, roll-on-roll-off shipping will be one of the main port businesses.
Regarding the change in the operation and management mode of Chinese ports, some will explore the management model of landlord port in the next 15-20 years. However, as Chinese ports have different development history and background, the landlord mode in China will have Chinese characteristics. Two kinds of landlord port operation and management models are expected to appear in China in 2030. One is that the managerial committee in the local government is the “landlord”, and the other is that existing state-owned port groups will change into “landlord”. Besides, in some places, state-owned enterprises are still the main investor, constructor and operator of ports, while some ports will introduce private investment. Private or foreign enterprises will become the main player of port operation.
With the application of advanced monitoring system and optimization of business process, the tallying industry in China may disappear in 2030.
In 2030, Chinese enterprises will build port networks around the globe, especially investing in port network in South America, North Africa, Southeast Asia, the Middle East and other developing countries and countries with strategic cooperation with China. Chinese enterprises with terminal handling as the main business will become global terminal operators.
In 2030, main container hub ports along the Chinese coast will have semi-automated terminals, but there are very few fully automated ones. First-class ports like Shanghai, Guangzhou, Qingdao and Tianjin will have one or two fully automated berths. Meanwhile, more than 90% of port machinery will use LNG or electric power instead of traditional energies. Wind power and solar power will become part of the port power system.
(4) Anticipation of the development of China’s shipping-related industries in 2030
Regarding ships for international shipping, Chinese-funded ships with foreign nationality won’t come back in large quantities, and the gap between Chinese-flagged and foreign-flagged ships concerning the ratio of their DWT in the total DWT will further widen. In 2030, foreign-flagged ships will take up 85-90% of the ships for international shipping controlled by Chinese ship owners. However, for the sake of national security and business operation, China will still take some measures to maintain a certain number of Chinese-flagged ships.
The number of Chinese seamen dispatched overseas won’t increase considerably. Chinese-flagged ships engaged in international shipping may hire more foreign seamen.
Higher education and vocational education will be given equal importance in China’s maritime education in 2030. Of full-time students studying in maritime colleges in China, foreign students will account for more than 30% and maritime education will be truly internationalized.
In 2030, while maintaining its world leadership in the design and R&D of traditional ship and port equipment, China will basically grasp the design, R&D and manufacturing technology of such high-end ships as LNG ship and luxury cruise. It will also establish its leading position in the Asia Pacific in that regard, and become a world-leading maritime technology R&D center. As one of the shipping information centers, innovation centers and standard centers in the world, China will have a say that influences the global shipping development.
In 2030, the Chinese mainland still cannot overtake Singapore’s position in Asia in maritime arbitration, but it will be the No.4 place of maritime arbitration side by side with Hong Kong after London, New York and Singapore.
In 2030, the freight forwarding industry will be affected by the development of e-commerce, and traditional offline services will be replaced by online services.
Regarding shipping finance and insurance, China will become the ship financing center only second to Europe and the US in 2030, and China’s ship financing will take up around 30% in the world. As energy conservation and emission reduction will be the general trend among both domestic and foreign ships, shipping carbon fund, carbon bond and carbon futures will develop, so will carbon trade and finance, shipping carbon trade, and private investment in shipping carbon trade. Financial leasing will be the second largest channel for China’s ship financing, and China will boast the second largest shipping insurance industry in the world. It will also become the second largest center worldwide concerning the trade of shipping derivatives. In particular, derivative trade based on China’s freight rate will be of strong influence in the international market.
(5) Anticipation of China’s environment for shipping development in 2030
The layout of global shipping centers will change in 2030, when Singapore, London and Shanghai will all become shipping centers with the capability of global shipping resource distribution. London will no longer be the leader of international shipping center and Hong Kong’s position as an international shipping center will fall. Meanwhile, a number of regional and dispersed shipping centers will appear.
In 2030, a shipping center system featuring reasonable layers, coordinated development and mutual benefits will take shape in the Chinese mainland. In this system with clear-cut layers and reasonable layout, Shanghai will be the leader with global service capability, Tianjin and Guangzhou will play a supportive role with international service capability in the region, and shipping logistics centers such as Qingdao, Dalian, Xiamen, Shenzhen, Chongqing, Wuhan and Nanjing will be the basis.
Regarding government management, it’s likely that the existing Coast Guard of the Ministry of Public Security, ocean supervision department of the State Oceanic Administration, maritime affairs department of the Ministry of Transport, fishing affairs department of the Ministry of Agriculture, offshore anti-smuggling police of the General Administration of Customs and other maritime management teams will be integrated and reorganized. As a result, a unified law enforcement team like the US coast guard will be formed.
In 2030, China will stand in a leading position in the world in opening up its shipping industry, which will have the following characteristics. The formulation and implementation of shipping policies will be more transparent, inward and outward opening up will be given equal importance, new rules of international trade will be complied with, and reciprocal opening up as well as coordinated opening up with trade, finance and other systems will be emphasized.
China’s border management organizations will be further integrated to realize the goal of one inspection, one fee payment and one customs clearance. Border customs clearance will be highly informatized, and 7×24h clearance will be realized nationwide. The model of customs clearance will change from “olive type” to “dumbbell type”.
(6) Anticipation of shipping information technology development in 2030
In terms of port informatization, port-based big data centers will appear in 2030 and data will be stored in a distributive way. It’s also possible that big data centers will be set up in Shanghai, Dalian, Guangzhou, Wuhan and other cities, which will be interconnected.
In terms of ship informatization, ships capable of remote and automatic piloting will be a reality in 2030, and the ConnectedShips technology will be mature and widely applied. Key technologies such as ship automatic identification, ship positioning, self-organized communication and energy consumption monitoring with independent intellectual property right (IPR) will appear in China. More than 80% small ship owners are expected to use ship management platforms on the cloud, 100% large ship companies will set up ship management platforms based on private cloud, and over 80% ships of domestic ship companies will be networked.
In terms of border informatization, “virtual border” may become reality, and non-border cities can carry out customs declarations and inspection and border inspection online.
In terms of maritime informatization, it is expected that the VTS independently developed by China will reach a world-leading level. “Multimodal” monitoring platform integrating traffic and logistics will appear, and China is likely to be the first developing such a platform and will dominate the standard formulation in that area. China will extensively adopt the automatic identification system compatible with AIS and based on the Beidou technology.
In terms of shipping e-commerce, shipping e-commerce platform will become trade platform that integrates supply chain management. Other forms of shipping e-commerce including ship trade platform, cruise booking platform and the platform for ship material supply will also develop.
(7) Anticipation of China’s cruise development in 2030
In 2030, China is likely to overtake Britain and Germany to become the world’s largest market of cruise tourism.
In 2030, China’s supply of cruise terminals is likely to be the largest in the world. At that time, four regional cruise port clusters will be formed, namely the one for Bohai Rim cruise tourism (mainly Tianjin, Dalian and Qingdao), the one for cruise tourism in the South China Sea (mainly Sanya, Hong Kong and Haikou), the one for cruise tourism in the Yangtze River Delta (mainly Shanghai, Ningbo and Zhoushan), and the one for cruise tourism along the southeast coast (mainly Zhoushan and the North China Sea). In 2030, the Shanghai cruise home port will evolve into a super cruise home port in the world. Multiple cruise companies set up their Asian headquarters in Shanghai and the city will become a base for headquarters of cruise service enterprises. Cruise booking centers will also land in Shanghai, so will the China cruise information center.
In 2030, the total number of cruise orders accepted by shipyards in China, Japan and ROK may account for 1/3 of the total tonnage built around the world, and China is likely to undertake 1/3 of that.
According to this report, there is vast room for China’s shipping industry in the next 10-plus years. China will stand in a leading position in the world in multiple areas, the shipping center will move to China, and China will complete the transformation from a big shipping power to a strong one. This conclusion is based on the judgment that the Chinese economy will have great prospects. Meanwhile, during this transformation, the future development of Chinese shipping industry will be subject to the decisive role of the shipping market. On the micro level, some Chinese enterprises will be eliminated because they cannot adapt to the change, and some government decisions will prove futile because they don’t keep pace with the trend. Therefore, if we can look farther, we may realize that some practices today don’t really follow the general trend and are consequently of little effect. We can also find out how to adapt to this trend and make efforts accordingly, thus making great progress.