Author Topic: China explains P3 rejection  (Read 5929 times)

Offline Hannes van Rijn

  • Top Poster
  • *****
  • Posts: 12,572
    • View Profile
    • http://www.shipspotting.com/userinfo.php?uid=20488
China explains P3 rejection
« on: June 21, 2014, 04:19:36 AM »
 
APM have announced that competition authorities in China have rejected the planned P3 Network alliance in East-West container trades. Photo: PA
 


China's Ministry of Commerce has confirmed its rejection of the P3 application. The P3 was to be an operational alliance made of three leading global container shipping companies, Maersk Line, MSC and CMA-CGM.

The ministry stated that, with investigations and reviews, it believes that the network formed by this alliance will limit or exclude competition in the Asia-Europe container shipping market.

As a result, the ministry made the decision to turn down the application of P3 in accordance with China's Anti-Monopoly Law.

As of 1 January, 2014, Maersk Line, MSC and CMA-CGM share 20.6%, 15.2% and 10.9% respectively in the Asia-Europe services, in terms of capacity, and any of the three is bigger than its competitors.

The Herfindahl-Hirschman Index (HHI), a commonly accepted measure of market concentration, in the Asia-Euro container shipping market, will climb from 890 to 2240 once P3 launched, stated the ministry.


Offline Captain Ted

  • Top Poster
  • *****
  • Posts: 8,996
    • View Profile
Re: China explains P3 rejection
« Reply #1 on: June 21, 2014, 01:30:26 PM »
@ Mike
of course,,just imagine if the US or EU would have made the rejection,,special the US,,an uproar through the world with storming US embassies, if China does that,,all is fine.
May be getting time not to buy too much Chinese goods anymore and manufacture there where the technology came from US and EU !!!!
NOW!!!,,,if we could get rid of the sailors,,how safe shipping would be !!!!!!!!

Offline Captain Ted

  • Top Poster
  • *****
  • Posts: 8,996
    • View Profile
Re: China explains P3 rejection
« Reply #2 on: June 21, 2014, 04:27:51 PM »
@ M.K.
you ever been in China ?
NOW!!!,,,if we could get rid of the sailors,,how safe shipping would be !!!!!!!!

Offline simonwp

  • Home away from home
  • ****
  • Posts: 226
    • View Profile
Re: China explains P3 rejection
« Reply #3 on: June 21, 2014, 07:25:43 PM »
It's a longstanding dilemma for these type of services. The most efficient way to operate them, especially in these economic and environmental times is as consortia.

However this does lead to market abuse and monopoly situations, through slowly squeezing out the smaller operators. The figures quoted on here do seem to back up the Chinese position, although the more relevant figure is the market share of the second ranked operator. If the difference between P3 and the second ranked is small, then the reasons for blocking P3 are less valid than if the difference is wide.

Offline Alan Green

  • Home away from home
  • ****
  • Posts: 287
    • View Profile
Re: China explains P3 rejection
« Reply #4 on: June 23, 2014, 12:32:10 PM »
China protecting the interests of COSCO and China Shipping Lines.

Offline jan_t

  • Home away from home
  • ****
  • Posts: 205
    • View Profile
    • http://www.jantiedemann.de
Re: China explains P3 rejection
« Reply #5 on: June 23, 2014, 01:06:45 PM »
imagine if the US or EU would have made the rejection,,special the US,,an uproar through the world with storming US embassies, if China does that,,all is fine.

What the heck are you talking about!? In the past, both US and EU competition authorities have disapproved of numerous mergers and acquisitions or made them subject to rather strict conditions.

IT and telecommunication M&A's, anyone?

Also, various US-administrations and US-government bodies have repeatedly 'regulated' (not to say '
manipulated') the 'free market' for the benefit of US-American firms.

Recommeneded readings in this context:

http://en.wikipedia.org/wiki/Dubai_Ports_World_controversy

http://en.wikipedia.org/wiki/United_States_Air_Force_tanker_contract_controversy

I can't recall anyone 'storming' US embassies at the occasion. So you're being overly dramatic here.

Offline sandygates

  • Not too shy to talk
  • *
  • Posts: 32
    • View Profile
Re: China explains P3 rejection
« Reply #6 on: June 23, 2014, 02:33:22 PM »
As I recall it, somebody made a first comment that the reason P3 was rejected was that no Chinese lines were involved. That, I am also convinced, is the real reason!
Unfortunately the original comment poster used a naughty word to emphasise his disagreement with the public relations waffle in the original press report so probably his valid comment was deleted.

Offline Alan Green

  • Home away from home
  • ****
  • Posts: 287
    • View Profile
Re: China explains P3 rejection
« Reply #7 on: June 23, 2014, 02:48:20 PM »
Courtesy of 4-traders:

Chinese officials hadn't previously expressed any skepticism over the deal, and industry officials widely expected Beijing to follow Washington and Brussels in approving it. One person familiar with the matter said China COSCO Holdings Co. and China Shipping Container Lines, two of China" biggest shippers, opposed the deal because of worry they would lose market share.

A Chinese shipping trade group also came out Tuesday publicly slamming the alliance, saying it would have given the three European-based shippers too much control of global trade routes.

Ministry officials weren't immediately available to comment Tuesday. Guo Huawei, company secretary at China COSCO, and Zhang Guofa, president of China Shipping (Group) Co., which controls CSCL, denied their companies had exerted any pressure on regulators. The Chinese "government's decision is made purely on its own merits based on law and regulation," Mr. Zhang said.

Zhang Shouguo, executive vice chairman of the China Shipowners' Association, which represents major Chinese shipping operators including China COSCO and CSCL, said the group was pleased by the decision. "We've expressed our concerns about the fundamental nature of the P3 alliance, which [would] give the world's top three container shipping operators a dominant position in some of the world's major trade lines," he said.

Offline ozzy76

  • Just can't stay away
  • ***
  • Posts: 76
    • View Profile
Re: China explains P3 rejection
« Reply #8 on: June 23, 2014, 02:59:00 PM »
Quote
Insert Quote
As I recall it, somebody made a first comment that the reason P3 was rejected was that no Chinese lines were involved. That, I am also convinced, is the real reason!
Unfortunately the original comment poster used a naughty word to emphasise his disagreement with the public relations waffle in the original press report so probably his valid comment was deleted.
.

Negative...Chinese companies were offered a stake in the Valemax shipping..Hell.. their shipyards even built some of them..The Chinese still. refused to let the Valemax dock in China. even. with Chinese owners and builders.
That is simply not it..The Chinese do not want any companies whether Chinese or foreign to have too big a slice of the pie..And would be able to set the market price for freight rates..End of.
The EU and USA should be doing the same thing.

Offline Captain Ted

  • Top Poster
  • *****
  • Posts: 8,996
    • View Profile
Re: China explains P3 rejection
« Reply #9 on: June 23, 2014, 10:24:14 PM »
Recommend to buy more Chinese,,,makes them really weak !!! :-))))
NOW!!!,,,if we could get rid of the sailors,,how safe shipping would be !!!!!!!!

Offline sandygates

  • Not too shy to talk
  • *
  • Posts: 32
    • View Profile
Re: China explains P3 rejection
« Reply #10 on: June 24, 2014, 08:04:53 AM »
What has the Valemax affair got to do with this one of container consortia?

Offline Captain Ted

  • Top Poster
  • *****
  • Posts: 8,996
    • View Profile
Re: China explains P3 rejection
« Reply #11 on: June 24, 2014, 12:57:35 PM »
@ Sandygates

Valemax at first initiated between Vale and China,,then rejected by China entry into their ports after Chinese shipping companies objected
Container,, China rejects P3 because no Chinese cont company is in the pool

NOW!!!,,,if we could get rid of the sailors,,how safe shipping would be !!!!!!!!

Offline ozzy76

  • Just can't stay away
  • ***
  • Posts: 76
    • View Profile
Re: China explains P3 rejection
« Reply #12 on: June 24, 2014, 05:46:45 PM »
Quote
What has the Valemax affair got to do with this one of container consortia?
.

Answer: Everthing.
China rejected Valemax even though they were offered a share in it.

Why did they reject it...Simple; Raw materials arrive in China by ship, and finished goods leave by ship.
The raw materials arrive in Bulkers and finished good leave in boxes on container ships.
Understand the reason why China rejected Valemax and you understand the reason why they reject P3.

By rejecting Valemax..China stopped, what they saw as a company getting control over the shipping hence the final price of Raw Materials.

By rejecting P3..China stopped what they saw as a Group of companies getting control over the price of shipping, hence the final price of consumer goods.

It has everything to do with it.
It's all to do with what China feels that a company or large company would have too much control..So even If Chinese were invited to P3..They'd still say NO..Just like they said no to Valemax...even after Chinese shipping were invited into that.

 

SMF spam blocked by CleanTalk