PUBLISHED : Tuesday, 26 November, 2002, 12:00am
UPDATED : Tuesday, 26 November, 2002, 12:00am

China has made major progress in shipbuilding as it concentrates on building for a domestic market plying the coastal trades, shipping experts say.

HSBC Shipping Finance managing director Russell Shields said the new yard at Waigaoqiao, outside Shanghai, was gaining rave reviews from luminaries such as Hong Kong Shipowners Association chairman Koo Kou-hwa. Mr Koo next year will take delivery of his first capesize bulker from the yard. Beijing said it wanted to expand the country's shipping production eightfold in the next decade. But what it had gained at some yards in quality, it still lacked in efficiency.

'What Waigaoqiao is producing are quality ships, very high quality. But the process of getting them on the water is quite slow. As they get their efficiencies up, they will end up being very competitive. You already can't get a berth anymore,' Mr Shields said.

Waigaoqiao, in Pudong, was the first of China's customs-exempt bonded zones, established in 1990. Besides the ships for Mr Koo, Shanghai Waigaoqiao Shipbuilding was also believed to have signed a contract with a United States client to build an extra 175,000 deadweight tonne bulk carrier.