The development of ship registration policy in China: Response to flags of convenience

Abstract

In order to expand registered fleet tonnage and strengthen ship management, China began to introduce a special tax-free ship registration (STFSR) policy in July 2007. However, more than eight years following its implementation, the policy ended in complete failure at the end of 2015. This paper comprehensively evaluates the main content and implementation process of the Chinese STFSR policy, analyzes the effects of the policy, and summarizes the concrete reasons for the policy's failure and lessons to be learnt. A new governance framework is being designed and future directions are being developed to explore how the government can implement a successful ship registry policy. This research is intended to provide new ideas and information to the Chinese shipping industry's policymakers and stakeholders in order to handle the "flagging out" problem, thereby mitigating the current adverse situation of ship flagging overseas while strengthening the management of ship operation.