How are the policies to be relaxed in the Shanghai Free Trade Zone (FTZ) for the shipping industry?

Under the Framework Plan, the Shanghai FTZ will relax restrictions on the proportion of foreign equity permitted in joint venture international shipping enterprises and allow wholly foreign-owned vessel management enterprises to be established in the Shanghai FTZ. Following the issuance of the Plan, two official documents have been issued by the country’s Ministry of Transport:

• Opinions on Implementing the Overall Plan for the Shanghai FTZ and Accelerating the Construction of the Shanghai International Shipping Center (Opinions); and
• Implementation Measures for Increasing the Proportion of Foreign Investment in the International Shipping Transportation and International Vessel Management Industries in the Shanghai FTZ (Measures).

Both the Opinions and Measures loosened the previous foreign shareholding cap in the international shipping transportation industry, allowing foreign investors to control more than a 49-percent stage in such enterprises registered in the Shanghai FTZ. This means that foreign investors can hold a controlling percentage of equity.

The Shanghai FTZ also allows wholly foreign-owned enterprises registered in the Zone to engage in the international vessel management industry, as opposed to the previous regulations under which only Sino-foreign equity joint ventures or cooperative joint ventures were allowed.