A Chinese firm with significant distant-water fishing operations has announced it has received a record subsidy payment from the local government in its home base of Qingdao.
Shandong Zhonglu Oceanic Fisheries Co. received CNY 20.5 million (USD 2.9 million, EUR 2.6 million) in subsidies in the first half of 2019. The figure is crucial to Zhong Lu’s profitability, given the company’s distant-water division reported that its profitability surged by 597 percent to CNY 21.7 million (USD 3 million, EUR 2.8 million) on revenues of CNY 193.3 million (USD 27 million, EUR 24.7 million).
The firm, which recorded revenues of CNY 515.4 million (USD 72.1 million, EUR 66 million) in the first half of 2019, up 17 percent year-on-year – didn’t detail what the funds were used for, but other large fishery firms have drawn down funds for modernization of vessels and port-handling facilities. The subsidy is further evidence that China’s subsidies to the distant-water fisheries sector will continue in different guises beyond any phase-out of fuel subsidies.
The Zhonglu pay-out comes as a fisheries representative body in one of China’s key distant-water home ports has flagged the “huge challenges” for the industry if China signs onto a WTO deal on curbing fuel subsidies to its fleet.
More than half of China’s distant-water fishing operations will be rendered unprofitable if fuel subsidies are removed, the Zhoushan Seafood Export Association warned in a circular published this week on its website. Calling on its members to “prepare in advance,” the association noted that fuel subsidy cuts will “directly lead to inefficient fishing vessels operating at a loss and [being] eventually eliminated.
“The impact on offshore fisheries [will be] even greater, as offshore fisheries receive more subsidies,” it said.
China’s distant-water fleet numbered more than 2,600 vessels in 2018 (the figure doesn’t count Chinese-owned vessels operating under other flags). Collectively, they recorded a catch of 2,275,500 metric tons, an increase of 8.21 percent year-on-year.
Zhonglu operates tuna-seine vessels from the port of Tema, Ghana, and claims to be China’s first distant-water operator to launch vessels targeting Atlantic tuna catches. Ghana-based Zhonglu subsidiary Yaw Addo Fisheries Co. is one of several China’s fishing firms in Ghana that have garnered for their scale and competition with local small-scale vessels.
A document on Zhonglu’s website credits its international expansion to the inspiration of the “One Belt, One Road” policy of Chinese infrastructure and economic expansion.
“[We] responded to the call of the party and the state, under the encouragement of the policy of going global and persisting in the development of the ocean economy,” Zhonglu said in its statement.
Photo courtesy of Shandong Zhonglu Oceanic Fisheries Co.
