China’s coastal cities competing for distant-water catch with generous subsidies

Chinese subsidies to the country’s distant-water fishing industry are more extensive than those allowed in competing nations and threaten both wild fish stocks and coastal communities in economically vulnerable areas, according to experts watching the sector.

Chinese subsidies to the country’s distant-water fishing industry are more extensive than those allowed in competing nations and threaten both wild fish stocks and coastal communities in economically vulnerable areas, according to experts watching the sector.

Zhangzhou is battling other cities in Fujian province, including Xiamen and Fuzhou – home to Pingtan Marine and several other distant-water firms – for share of the country’s distant-water catch. Zhangzhou is offering a payment of CNY 3 million (USD 480,000, EUR 420,000) to any fishing firm which chooses to relocate its base of operations to the city. To be eligible, the firm must be able to prove it has an annual catch of 5,000 tons. Additionally, the city offers CNY 500 (USD 80, EUR 70) per ton of distant-water catch brought back to Zhangzhou. The extent of subsidies being offered by Chinese coastal cities to build up distant-water fishery fleets is apparent in a new document titled "Notice on Eight Measures for Promoting the High-Quality Development of Pelagic Fisheries" issued by the municipal government of Zhangzhou.

Zhangzhou has also begun offering newly added ocean-going fishing boats (excluding transit fishing boats) approved by China’s Ministry of Agriculture and Rural Affairs a one-time bonus of 10 percent of the cost of each boat, to be given at the provincial level, up to a maximum of CNY 2 million (USD 320,000, EUR 280,000). Subsidies are also available in Zhangzhou for the purchase by local companies of large-scale tuna purse-seiners and ultra-low temperature longline fishing boats less than a decade old. The companies must have secured fishing quotas from abroad or outside the province.

Additionally, China’s central government offers additional incentives for new entrants to the distant-water fisheries – firms approved by China’s Agriculture Ministry can get up to CNY 200,000 (USD 32,000, EUR 28,000) per new vessel, with the cash coming from city, county, and provincial level funds. Additionally, newly established distant-water fishery companies can avail themselves of “discounted loans” with a 40 percent discount on normal corporate lending rates at the government-controlled city banks. Zhangzhou’s document also commits its government to “guide financial institutions to launch more marine credit products and marine-related insurance products” and develop new loan products designed for the fishing industry.

The subsidies being offered by Chinese provinces such as Zhangzhou are more generous and less restrictive than those offered to European Union fleets, according to Daniel Voces de Onaíndi, the managing director of E.U. fisheries representative body Europêche.

“Fishing vessels operating under the framework of E.U. fisheries agreements with third-countries are normally requested to land at least part of the catch in the third-country’s fishing ports and part of the catch is directly commercialized in that region, for instance small pelagics in Africa, not in Europe,” Voces de Onaíndi said. “Investments and compensation for the fleet in the E.U. are very restrictive, particularly for vessels over 12 meters, and strictly conditional upon their consistency with the conservation objectives of the [E.U.] common fisheries policy.”

Isabel Jarrett, manager of The Pew Charitable Trusts’ program to end harmful fisheries subsidies, which has pushed for a deal at the World Trade Organization to end such subsidies, said she was dismayed by the Zhangzhou subsidies. China spends an estimated USD 2.9 billion (EUR 2.5 billion) in capacity-enhancing subsidies to support its fleet’s activity outside of its own waters, she said, and more than half of distant-water fishing is unprofitable without subsidies.

“It’s therefore disheartening to hear news of China further expanding its distant-water fleet when the science is clear that we need less, not more, distant-water fishing,” she said.

The Zhangzhou document does encourage local distant-water firms to install the Beidou satellite system – China’s alternative to GPS – alongside video-monitoring systems on board.

“Vessels equipped with modern equipment such as catch monitoring and reporting, seawater desalination, direct drinking water, rescue, anti-piracy, garbage, sewage, and oil pollution treatment” are entitled to CNY 200,000 (USD 32,000, EUR 28,000) in support per vessel, according to the document.

The E.U. also allows for subsidies for better control of fishing operations, said Voces de Onaíndi. The new European Fisheries Fund (EMFAF) “supports the purchase, installation and management of certain equipment for control purposes, such as CCTV or monitoring of engine power, which have been proposed under the new fisheries control system [still under negotiation].”

However, compulsory vessel tracking devices (VMS) and electronic reporting systems (e-logbook) have been mandatory for all vessels in the E.U. over 15 meters since 2009, he said.

“Support is not granted simply for complying with control requirements that are obligatory under E.U. law,” he said.

The Zhangzhou subsidy package, which is on offer until the end of 2024, underlines the “need for multilateral action at the WTO to curb harmful fisheries subsidies and the sooner, the better,” Jarrett told SeafoodSource.

“WTO members should ensure that the final treaty text includes strong rules to curb harmful subsidies to distant-water fishing – on the unregulated high seas, regulated high seas, and other countries’ [exclusive economic zones],” she said.

Chinese provinces have been heavily subsidizing their distant-water fleets “largely because their near-shore fisheries have previously been heavily depleted and some are now being managed to restrict fishing capacity,” according to Steve Trent, CEO of the Environmental Justice Foundation, which monitors overfishing globally. Subsidies such as these have allowed China’s distant-water fleet to reach “vast overcapacity,” with consequences for poorer coastal nations, he said.

“China is now by far the largest distant-water fleet in the world and its actions have consequences that impact almost every nation, but especially poorer countries where communities depend on marine resources for food and livelihoods,” he said. “In Ghana, for instance, overfishing and illegal fishing by trawlers that are overwhelmingly beneficially owned by Chinese corporations is threatening the basic human rights of fishing communities.”

Trent said a recent EJF report revealed 70 percent of 215 fisheries workers interviewed has experienced declines in their income, and around half had gone without sufficient food in the past year. EJF has called for China and other major fishing nations to commit to transparency in reporting details of their distant-water fleets.

“Our investigations have revealed that the Chinese distant-water fleet is rife with illegal fishing, uses harmful practices such as bottom-trawling, and targets endangered and protected marine life,” he told SeafoodSource. “We have also documented gross human rights abuses of migrant crew. These state-subsidized vessels are ravaging our ocean, destroying marine ecosystems, committing human rights abuses and driving environmental injustice, often hiding behind complex onshore corporate structures preventing those responsible from being held to account.”

Photo courtesy of Environmental Justice Foundation


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