China will implement a shipbuilding license system, as stipulated by a draft of the Shipbuilding License Management Law.

The Commission of Science Technology and Industry for National Defense published the draft rules Tuesday, seeking public comment, the Shanghai Securities News reported on Wednesday.

The State hopes to take advantage of the license system to encourage Chinese shipyards to adopt advanced equipment and technologies, as well as modern management methods.

It is an attempt at improving ship quality and security, promoting environmental-friendly production, eliminating out-dated production capacities, and optimizing and upgrading the ship industry structure.

According to the draft, shipbuilding licenses fall into two large categories: manufacture (including ship reconstruction) and maintenance. There is also further detailed classification in terms of ships' usage and building materials.

The draft stipulates that enterprises without shipbuilding licenses are prohibited production. Those using faked or manipulated licenses or submitting false application materials for a license will be fined between 100,000 yuan (US$13,247) and 500,000 yuan. Their illegal income will be confiscated and their direct principals will be fined 20,000 yuan to 100,000 yuan.

China has become the world's No 3 shipbuilder after Japan and South Korea, and China's shipbuilding industry accounts for 20 percent of the global market.

In the first half of this year, China's shipbuilding industry reported a year-on-year 151 percent increase in profit, and the current volumes of new and remaining vessel orders in the period both exceeded those of Japan and South Korea for the first time.

(Chinadaily.com.cn September 6, 2007)