CHINA SHIPPING PREDICTS TRADE REBOUND, DISCLOSES CONTAINER LOSS

CHINA SHIPPING PREDICTS TRADE REBOUND, DISCLOSES CONTAINER LOSS

   China Shipping Development Co., the stock market listed arm of China Shipping (Group) Co., revealed that its affiliate, China Shipping Container Lines, made a heavy pre-tax loss of 1.1 billion Renmibi ($136 million) in 2001.

   China Shipping Container Lines’ loss was due to “the growth of world trade slowed down and more shipping capacity was delivered into service,” said China Shipping Development Co., which owns 25 percent of the fast-growing container carrier.

   The carrier’s loss represented 14 percent of revenues. China Shipping Container Lines posted revenues of 7.8 billion Renmibi ($940 million) in 2001, up 11 percent on the previous year, as freight rates fell. The carrier’s total container traffic rose by 21 percent, to 1.74 million TEUs. About a quarter of the carrier’s volume comes from China’s domestic trade.

   Despite the affiliate’s loss, China Shipping Development said its operations would benefit from stronger trade growth this year.

   “It is expected that the global economic recession will soon come to an end and the global economy will recover steadily,” said Li Kelin, chairman of China Shipping Development Co. and president of China Shipping (Group) Co.

   Li said exports from China would increase by 5 to 6 percent this year, and imports to China would be up by a higher percentage than exports.

   “The group, being one of the largest shipping groups in China and the Far East, is expected to benefit from the increase in the foreign trade of China,” Li said in the annual report of China Shipping Development Co., just published.

   “With the recovery of the global economy, the level of freight rate is expected to rise gradually in 2002,” Li said. He added that China Shipping Container Lines will “take every possible measure” to improve its operating results for this year.

   China Shipping Container Lines has rapidly entered and expanded into the major transpacific, Asia/Europe and U.S./Mediterranean container trades over the past three years.

   “Despite the difficult market situation, China Shipping Container Lines has established itself as one of the top 20 carriers in the world,” Li said. The Chinese state-owned carrier was ranked as the 17th largest carrier in volume in the U.S. container trade last year.