Since last year, the cruise tourism at the Pearl River Delta has become a new growth point of the tourism industry of Guangzhou. This year, the Nansha Cruise Home-port has a new member! The  Costa Victoria has launches its service at this cruise home-port since January 23, 2017. During the Spring Festival holiday, there were five cruise voyages that started from the Nansha Cruise Home-port, providing services for 13,000 tourists.

 

In September 2015, Guangzhou introduced the Three-Year Action Plan for Building International Shipping Center in Guangzhou (2015-2017). Just after the Spring Festival holiday, the local government of Guangzhou gave a “red envelope” for the construction of the international shipping center. This year, RMB2.52 billion out of the municipal key security fund of Guangzhou will be allocated for the construction of the international shipping hub.

 

“The city should rely on the port to seek for a prosperous development and the port should serve the development of the city so that both the city and the port will have a mutual prosperity.” Ports are the core resources for the development of Guangzhou. Experts at the Group for Research of Innovation of Air Transportation and Shipping Finance of Guangdong University of Finance believed that, currently, the financial institutions in Guangzhou are not familiar with the shipping industry and lack related professionals. They suggested that Guangzhou should promote the development of the Financial Leasing Alliance and set up public service platforms for financial leasing. The Financial Leasing Alliance of Guangzhou should be encouraged to establish financial leasing fund to mobilize more capitals to promote the development of the financial leasing industry of Guangzhou.

 

Cruise industry seizes the key opportunity from upgrading of tourism consumption

 

During the Spring Festival holiday, Ms. Lu and her family members, citizens of Guangzhou, had a tour to Ha Long Bay (Vietnam) by taking the Genting Dream, which is a luxury cruise ship. She said that they had a tour to Japan by taking the Superstar Virgo last year and felt very good. “You can trip around the world by taking a cruise in Nansha. It is just so convenient.”

 

Yang Gongji, president of the South China Innovative Finance Research Institute of Guangdong University of Finance, believed that cruise tourism has seized the key opportunity from the upgrading of tourism consumption. The emerging industry is just in step with the trend of the transformation of local citizens’ interests from sightseeing tours to recreational tours.

 

It was learnt that, from last January, when the Nansha Cruise Home-port was put into operation, to December, there were 188 cruise voyages through this port, serving 290,000 tourists. This enables the port to rank second nationwide in terms of scale.

 

A port is connected with the whole world, and a ship can reach all five continents. Yang believed that, the large population and well-developed economy in the Pearl River Delta decide that there are both consumption intentions and abilities for the development of cruise tourism. In recent years, the intercity road and railway networks centering on Guangzhou have become more and more convenient, and the Baiyun airport have extended its services all over the country and even the world as an international hub, providing steady flow of passengers and therefore becoming the “second supply side” of tourists for the cruises.

 

Since January 2016, following the opening of the regular line for the Superstar Virgo of Star Cruises at the Nansha Cruise Home-port, Guangzhou formally entered the “era of cruise tourism home-port”. Through the development in the past one year, Guangzhou has become the No.3 cruise home-port city of China, and cruise tourism has become a new economic growth point for the tourism market.

 

“Concerning commercial value, Nansha is ice-free throughout the year so that there is a high cruise utilization rate.” Mao Yanhua, vice president of the Institute of Free Trade Zones of Sun Yat-Sen University, believed that Nansha has unique advantages for the construction of international shipping center of Guangzhou and the cruise industry that meets the new demands for tourism provides support for the development of the international shipping center.

 

More industries should be developed for the construction of international shipping center

 

Mao believed that, as a thousand-year-old business city, Guangzhou has never been lacking in business opportunities. The government of Guangzhou has decisively built Nansha into a cruise home-port relying on the Nansha Zone of the China (Guangdong) Pilot Free Trade Zone and therefore promoted a prosperous development of many high-end industries.

 

Yang Gongji said that, the ports promote the prosperity of the thousand-year-old business city. From a global perspective, the best-developed metropolises, such as New York, London and Tokyo, are all developed based on ports. In 2016, the cargo throughput and container throughput of Guangzhou Port respectively ranked sixth and seventh among the international ports. Nansha Port ranked top among global single ports in terms of container throughput.

 

Yang believed that, after finishing the construction of the infrastructure of the ports, which are the base for building the international shipping center, the government should make innovations of the financing modes and explorations for the development of more related industries. Only in that way can the international shipping center be built up.

 

“Nansha Port has a number of specialized wharfs, including the Phase I and II container wharfs, the Nansha Auto Wharf, the Xiaohu Petrochemical Wharf, the Gangfa Petrochemical Wharf, the Kingboard Petrochemical Wharf and the Nansha Port Grain and General Wharf. A layout consisting container, auto, grain and petrochemical sectors has basically taken shape. There are 50 berths for them. The shoreline of Nansha Port is totally 10,400 meters. The designed annual cargo throughput is 170 million tons, and the designed annual container throughput is 9 million TEUs,” Yang said, showing great familiarity with these data.

 

“To build the international shipping center, the function of financial innovation should be given full play to develop more related industries.”

 

Strive to pilot international ship registration system in Nansha free trade zone

 

“The ship owners need to make financing to buy and operate ships. Generally speaking, ship financing accounts for more than 50% of the overall shipping finance. Now, both Guangzhou and the Pearl River Delta have a huge ship financing market,” Yang said.

 

“Currently, ship operation enterprises can only make financing through mortgage loans. The mortgaged assets may include shorelines, land, plants and equipment, which are properties located along the banks of rivers and seas, special equipment or assets with low value. It is hard for commercial banks to dispose these assets and also, it is hard to redevelop and reuse them for commercial purposes.”

 

Yong Heming, president of Guangdong University of Finance, analyzed that the domestic banks can only provide services for ship financing in single mode, while the financial leasing companies in Guangzhou mainly focus on big clients to deal with ship-related financial leasing operations. In addition, most of Chinese companies engaged in ship-related financial leasing operations are weak in technical risk assessment and risk monitoring concerning the shipping market and ships.

 

The research group believed that, currently, the financial institutions in Guangzhou are not familiar with the shipping industry and lack related professionals. They suggested that Guangzhou should promote the development of the Financial Leasing Alliance and set up public service platforms for financial leasing. The Financial Leasing Alliance of Guangzhou should be encouraged to establish financial leasing fund to mobilize more capitals to promote the development of the financial leasing industry of Guangzhou. Then, the ecosystem for financial leasing should be built up. Great efforts should be made to strive to pilot the international ship registration system in Nansha free trade zone. The International Ship Registration Center of Guangzhou should be established to attract more international ships to register in Nansha and expand the ship financing market of Guangzhou. Moreover, preferential tax policies for the ship financing processes should be introduced to exempt ship transaction tax, tariff, added-value tax and other related taxes on ships with registration in Nansha. The provincial government of Guangdong should strive to introduce systematic policies and measures to encourage financial leasing companies to seek for a development in the Nansha free trade zone, including adopting lower standards for access to the financial leasing market and simplifying the administrative examination and approval procedures for establishment of financing leasing companies. Great efforts should be made to rely on the financial innovation in Nansha New Area to provide a good financial ecological environment for ship financing. The new mechanism for cooperation between Guangzhou and Hong Kong in finance should be improved, and a common financial market should be established between Guangzhou and Hong Kong.

 

Source: Translated from Invest Guangzhou, February 14, 2017