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SINGAPORE (Reuters) – Chinese banking institutions have sharply increased loans to global shipowners as European lenders retreat from the marketplace but some are driving a difficult discount: the fund often comes with the condition that vessels be built in China. The role performed by Chinese lenders has attracted the ire of some industry critics, who say an already oversupplied global fleet will only increase because shipowners are taking benefit of cheaper rates from Chinese back yards compared to other builders. Chinese shipyards received new purchases of 11.of the calendar year 57 million deadweight tonnes in the first four weeks, up 57 percent from the same period in 2012, data from the China Association of the National Shipbuilding Industry demonstrated.

A key supporter has been the Export-Import Bank or investment company of China, an insurance plan bank that delivers financing to improve government financial goals. Chen Bin, deputy general manager of the bank’s transportation finance department. In Apr Chen told a Sea Asia delivery conference in Singapore. Last month, Greek shipowners ordered 142 vessels, more than 60 percent of their global orderbook, from Chinese yards. Good prices and Chinese financing were among the reasons, Greek Shipping Minister Kostis Moussouroulis was quoted by China’s standard Xinhua News Agency as saying at that time. Included in this, Diana Shipping Inc (DSX.N), Angelicoussis Shipping Group Dynagas and Small Ltd.

Export-Import Bank or investment company of China, the bank said on its website. 46.5 billion in loans, data from Norway’s DNB, the world’s largest shipping loan provider, shows. 13 billion in excellent shipping loans in May, up 30 % from the finish of 2011, and planned to offer more, Chen told Reuters. He declined to provide a focus on.

Timothy Ross, head of Asia-Pacific transportation research at Credit Suisse. Seadrill Co. Ltd (SDRL.OL), Sevan Drilling ASA (SEVDR.OL) and Singapore-based Frigstad Offshore Ltd, all of which have made orders at Chinese back yards within days gone by two years, didn’t respond to requests for comment. But Larry Pupkin, director of Singapore-based Littoral Management, which helps shipowners find yards for arrange and structure financing, said Chinese financing and quotes conditions were attractive.

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Chinese banks aren’t alone in assisting their shipyards. Bankers and lawyers said policy banking institutions in South Korea were also giving finance to shipowners to place purchases at Korean back yards, season which topped China in the worthiness of purchases last. 18.2 billion in purchases, based on the World Shipyard Monitor published by Clarkson Research Services. 11.5 billion in agreements for 125 new ships at Korean back yards. In tonnage terms, South and China Korea were neck-and-neck, the Clarkson data demonstrated. Jon Windham, mind of commercial research at Barclays for Asia ex-Japan.

The oversupply of vessels, low delivery rates and slow demand has attracted concern from some industry officials in China. Zhang Shouguo, executive vice president of China’s Shipowners’ Association. In a letter submitted on the organisation’s website, Zhang estimated that global dispatch supply exceeded demand by 30 percent. Beijing has guaranteed to help its vast shipbuilding sector develop within a broader work to up grade the country’s substantial production industry.