Newsroom Blog
NOT only will they build you the fleet you have always wanted, but they will lend you the money to pay for it too.
The Chinese have pushed billions of dollars at western shipowners in recent months, as loans from long-established shipping banks have all but disappeared.
This is a microcosm of the bargain the Middle Kingdom has had in place with the US and Europe for years. China has effectively promised to underwrite our trade deficits indefinitely by buying our government bonds for just as long as we keep buying their consumer goods.
Miraculously, even after the credit crunch, this astonishing show is still on the road.
The nationality of lenders to shipowners is neither here nor there, as long as vessels make profits sufficient to service the debt.
If those pin-striped paradigms of prudence at the banks really are too timid to ante up badly needed funds in the face of current uncertainties, shipowners can be forgiven for looking elsewhere.
But bear in mind the old adage that if something cannot go on for ever, it will not. Right now, it suits China to keep the loans flowing so that it can still knock out ships. Tomorrow it might not.
According to one report, Chinese banks made loans totalling $146bn in the first 20 days of this January alone. The Chinese regulators have read the riot act to Industrial and Commercial Bank of China and Bank of China, and ordered a suspension.
Residual adherence to nominal communism does not immunise China from the risks of asset bubbles, and the impact of its bubble bursting would like the Dubai crisis to the power of 10. Caveat emptor.
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