A state-owned firm will work with an Italian shipbuilder to construct vessels in Shanghai that can carry up to 5,000 passengers

China's first luxury cruise ship will be able to carry up to 5,000 passengers when it is delivered in 2021, creating a new opportunity for the country to enter the world's lucrative cruise liner market.

State-owned China State Shipbuilding Corp and Italian shipbuilder Fincantieri Cantieri Navali Italiana SpA will establish a joint venture in Hong Kong. The venture will spend 25 billion yuan ($3.7 billion; 3.4 billion euros) building five luxury cruise liners.

CSSC will take a 60-percent stake in the new company, while the Italian side will hold the remaining shares. The money will come from an industrial development fund for cruise liners from five Chinese banks, including Bank of China, Agricultural Bank of China and China Construction Bank, according to CSSC.

Under the framework, Shanghai Waigaoqiao Shipbuilding Co, a subsidiary of CSSC, will be responsible for building the liners. Chen Gang, vice-president of Shanghai Waigaoqiao Shipbuilding, says each of these ships displaces 133,500 metric tons and their length will exceed 300 meters. Each ship will cost around 5 billion yuan to build.

The Shanghai shipyard has already established a specialized department to start design work and they are scheduled to be built in 2017. "The cruise liners built in China will highlight Chinese elements, with the guest rooms decorated in the style of either a traditional Beijing courtyard or an old-fashioned Shanghai residential room," Chen says.

Fincantieri, the Italian partner, founded in 1780 and headquartered in Trieste, is one of the biggest cruise liner manufacturers in the world, with 21 shipyards in Asia, Europe, and North and South America. It is able to build cruisers of all types.

Dong Liwan, a shipping industry professor at Shanghai Maritime University, says cruise liners are the only high-tech ship products that China has yet to master. European shipyards, including Italy's Fincantieri, Germany's Meyer Werft, and STX France SA, account for 90 percent of global orders.

"To date, Asian shipbuilders, including Japan and South Korea, are incapable of either designing or building cruise ships independently," Dong says.

A cruise liner is the result of the combination of many technologies. Up to 75 percent of the value of a cruise liner is handled by subcontractors.

Contact the writers through zhongnan@chinadaily.com.cn

(China Daily European Weekly 07/08/2016 page30)