Global shipping sustained a heavy blow IBUonline is a B2B foreign trade platform which offers comprehensive foreign trade

services to China suppliers and international buyers. IBU also keep an eye on shipping industry. The global shipping industry, often seen as a barometer of the health of the world economy, sustained a heavy blow from the recent global economic woes. Coscos troubles are part of a broader industry shakeout that has been exacerbated by the nations rise as a global shipping power, said Liu Bin, a professor at Dalian Maritime University in Liaoning province. Liu said although the world economy is recovering slowly, both developed and emerging economies such as China, Brazil, France and Germany have reduced their commodity demand. Unpredictable United States currency policies and falling commodity prices have also forced international goods traders and governments to lower their expectations for global trade. Because the flagging European and U.S.A economies and increased shipping capacity have led to long-term lower profitability, Chinese shipping companies will continue to struggle in the second half of the year as the nation is experiencing an economic slowdown and high oil prices, said Zhou Liwei, a researcher at the China Classification Society in Beijing. Given expectations of a further global slowdown in the second half, analysts dont expect the shipping sector to return to profitability in the short term. Most Chinese shipping lines hope to get government subsidies or aid. Tan Li, general manager of strategic development at China Cosco Holding, said the company is looking more carefully at certain market segments to make a profit. Although the container and bulk cargo businesses are being squeezed, 60 percent of our capacity is concentrated in the multi-purpose heavy lift on board, Tan said. In addition, about 30 percent of our capacity is concentrated in special vessels. For the drilling-vessel business in 2014, in 2015, we see a rising trend, Tan said.

Rather than waiting for the government policy to stimulate the market, the management team of China Cosco Holdings plans to sell Cosco Logistics Co to State-backed parent company China Ocean Shipping (Group) Co for 6.74 billion Yuan. The sale will give China Cosco a pretax gain of about 1.96 billion Yuan by the end of this year. China Shipping Container Lines Co Ltd, another major shipping firm, is keen to invest $1.51 billion to equip six liquefied natural gas carriers from Shanghai-based Hudong-Zhonghua Shipbuilding (Group) Co Ltd. Meng Lingru, an industry analyst with Shanxi Securities Co, said Chinas economy is still dominated to some extent by investment policies and packages, which could help big shipping companies find new market growth. Chinas urbanization means more buildings, roads and manufacturing facilities will be built in cities and towns, which could save its shipping industry as cities demand more grain, commodities, raw materials and energy, Meng said. Thus, any investment-based stimulus methods will shore up its shipping industry, which has been struggling with harsh market conditions in recent years. IBU expressed that shipping industry will support e-business development greatly.