China shipbuilder shores up yuan’s use in trade via landmark containership deal
Hudong-Zhonghua Shipbuilding is due to deliver six vessels to a Hong Kong containership lessor by 2028
A prominent state-owned Chinese shipbuilder known for being at the centre of the nation’s naval modernisation has signed a deal that will help advance the yuan’s internationalisation while further consolidating China’s leading role in containership manufacturing.
China’s Hudong-Zhonghua Shipbuilding, based in Shanghai, has entered into an agreement with Hong Kong-based containership lessor Seaspan Corporation for the construction of six containerships, each with a capacity of 13,600 TEUs (20-foot equivalent units), according to a statement posted on social media on Friday.
The order also marked the first such deal made in yuan, the statement added, without providing details of the purchase price. International shipbuilding contracts are usually settled in US dollars.
“It is one of the few large shipbuilding orders signed directly by foreign shipowners with Chinese shipbuilding companies using this new payment method,” the statement said. “It is of great significance to promote the internationalisation of the yuan.”
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A subsidiary of China State Shipbuilding, Hudong-Zhonghua said the container ships were designed with sustainability and low-energy use in mind. The vessels, measuring 336 metres (1,002 feet) in length, 51 metres (167 feet) in width and 30.2 metres (99 feet) in depth, are due for delivery between 2026 and 2028, the statement said.
The yuan’s use in settling the transaction will help Hudong-Zhonghua reduce foreign-exchange risks, enhance profitability and improve market competitiveness, the company added. Financing costs will also be lowered for shipowners, and it will lift efficiency in trade, according to the statement.
Despite the yuan lacking full convertibility, China has stepped up efforts to promote the Chinese currency’s use in international trade in recent years.
In August, the yuan retained its position as the fourth-most-active currency for global payments by value, with a share of 4.69 per cent compared with the world-leading US dollar’s 49.07 per cent, according to the latest data from the Society for Worldwide Interbank Financial Telecommunication (Swift), the world’s largest interbank messaging service.