Twenty-five Chinese ships flying foreign flags of convenience will register with the country's shipping administration soon, increasing its command over maritime transport.
Many Chinese ocean-going vessels have registered abroad to avoid paying the relatively higher taxes at home and cut the overall cost of transportation. So they fly foreign flags, or flags of convenience.
But after the government adjusted its maritime taxation policy, granting tax exemptions from July 1, many ocean-liners have vowed to register at home.
Xiong Wei is director of the international shipping administration division of the Ministry of Communications. He said yesterday, the 25 ships, the first such batch to register domestically, will add 1.02 million deadweight tons (dwt) to the Chinese-flag fleet's capacity.
"In the next two years, the policy is expected to bring more vessels back to the Chinese-flag fleet and increase its capacity by at least 4 million dwt," Xiong said.
According to the ministry's figures, 1,920 ships fly the national flag now, with a total capacity of more than 24 million dwt.
If the total number of vessels owned by the Chinese but registered abroad are taken into account, China would have the fourth largest fleet in the world in terms of dwt, says a report by Germany-based International Shipping Logistics.
At the moment Chinese-owned merchant ships flying foreign flags account for more than half of the total deadweight tonnage of Chinese fleets.
That percentage is not unusual. Statistics suggest half of the world's international tonnage was registered under flags of convenience in 2000.
Many Chinese ship operators have registered their vessels overseas to avoid the 27.53 percent tariff and import value-added taxes on importing vessels. A number of them are expected to return home for registration.
But insiders say the number of Chinese vessels registering overseas is increasing with the expansion of merchant fleets.
90 percent of the country's foreign trade, and virtually all of its crude oil and iron ore imports rely on maritime transportation. China thinks it is therefore necessary to have a better command over ocean-going ships to ensure economic safety.
To ensure that, the Ministry of Communications announced in June that Chinese-owned ships registered overseas before 2006 will be allowed to register at home - in Shanghai, Tianjin or Dalian. They will also be exempted from the customs duty and import value-added tax.
Questions:
1.Why do some Chinese owned vessels register abroad?
2.Importing vessels are subject to what percentage tariff and import value-added taxes?
3.What percentage of China’s foreign trade relies on maritime transportation?
4.Ships registered before what year will be allowed to register at home and be exempted from customs?
Answers:
1.To avoid relatively higher taxes in China.
2.27.53 percent.
3.90 percent.
4.2006.
（英语点津 Celene 编辑）
About the broadcaster:
Jonathan Stewart is a media and journalism expert from the United States with four years of experience as a writer and instructor. He accepted a foreign expert position with chinadaily.com.cn in June 2007 following the completion of his Master of Arts degree in International Relations and Comparative Politics.
