CNFC Overseas Fisheries, the listed arm of state-owned China National Fisheries Corp (CNFC), has taken in CNY 77.9 million (USD 11 million, EUR 9.9 million) in subsidies allotted to the company from China’s central government – which also owns the firm.
CNFC received the subsidies for scrapping and renovating trawlers, under the terms of a government program. The money will come in handy after the firm flagged a loss of between CNY 42 million (USD 6.1 million, EUR 5.4 million) and CNY 48 million (USD 6.9 million, EUR 6.1 million) for the first half of 2019. Subsidies are crucial to the profitability of CNFC given the firm reported total revenue of CNY 279 million (USD 39.3 million, EUR 35.3 million) for the first six months of 2019, down 2.73 percent on the figure for the first half of 2018. It saw revenues from fisheries drop 16 percent last year to USD 94 million (EUR 85 million).
The payout represents an upswing in China subsidy payments, which have been declining in line with China’s ongoing shift in how it awards subsidies from fuel costs to vessel renovation and the development of fishing ports. CNFC recorded subsidies worth CNY 95.2 million (USD 13.3 million, EUR 12.1 million) in 2012 and CNY 43.3 million (USD 6.1 million, EUR 5.5 million) in 2013, with CNY 40 million (USD 5.6 million, EUR 5.1 million) in subsidies booked by the firm in 2017. The figure being spent on distant-water fuel subsidies stood at CNY 3.6 billion (USD 515 million, EUR 455.8 million) in 2018.
In 2015, China's Ministry of Finance announced a cut to the fuel subsidies China pays its fishing fleet and aquaculture sector, with subsidies set to be cut by 40 percent against 2014 levels by 2019. Under the new regime, 20 percent of subsidies were to be issued in the form of payments to scrap and convert vessels. Local governments, which administer the subsidies, are also required to use subsidies to help fishermen switch to other businesses. This is considerable, given China paid out CNY 24.2 billion (USD 3.4 billion, EUR 3.1 billion) in 2014, according to official statistics, with one-fifth of that overall figure heading to its distant-water fleet.
Last year, the China’s Fisheries Ministry and the National Development & Reform Commission, which advises government on policy formation, introduced “China Ports Investment Program 2018-2025,” which pledged investment to improve berthing and safety facilities at fishery ports.
CNFC hasn’t been the only firm to benefit from China’s subsidies of its fishing sector. Zoneco bagged a 319 percent increase in subsidies last year – CNY 30.4 million (USD 4.4 million, EUR 3.9 million) of which supported its various R&D programs, according to company filings. Zoneco, which has vessels in domestic and distant waters, also got CNY 3.67 million (USD 513,600, EUR 464,700) for scrapping fishing vessels.
