About 30 per cent of China’s coastal shipping companies are experiencing losses due to overcapacity and high fuel prices, said Xu Zuyuan, vice minister of transport. In addition, he claimed some 40 per cent of the country’s inland shipping firms are also suffering a loss.

Data from the ministry shows China’s cargo handling capacity from major ports stood at 2.08bn tons in the first quarter of 2011, up 14.3 per cent year-on-year. However, according to a Xinhua report, some smaller shipping lines have lost business due to rising oil and labour costs.

“We are at the edge of a loss since exports decreased with the renminbi’s appreciation,” said Zhang Zuohai, general manager of China Container Line (Shanghai). According to Mr Zhang, the company is losing some clients from Europe and the US that have turned to cheaper markets such as India and Vietnam.