China to restructure two shipping giants

The Chinese government has approved the restructuring of the country's two shipping conglomerates, official sources said on Friday.

With the approval accorded by the state council, the China Ocean Shipping Company -- known as COSCO or COSCO Group -- and the China Shipping (Group) Company will be restructured, Xinhua quoted the Assets Supervision and Administration Commission (SASAC) as saying.

While COSCO Group is a shipping and logistics services supplier, the China Shipping (Group) Company is mainly engaged in shipping of oil tankers, passenger ships and container vessels.

The proposed merger will combine the two companies' container-shipping operations to create the world's fourth-largest container-shipping line, it is understood.

The merger of China's two major shipping groups comes as the nation is attempting to reform its state-owned businesses in hopes of creating bigger and stronger national champions that can better compete abroad.

China's shipping companies have been hard hit by the nation's economic slowdown, compounded by the persistent global oversupply in shipping capacity.