Government to provide 40 billion won for shipbuilding in China and Taiwan

[Financial News] The government is providing around 40 billion won to fishing companies that commissioned vessels from shipyards in China and Taiwan, it has emerged. The funding comes from the Distant-Water Fishing Vessel Safety Fund, which provides interest-free support for up to 50% of construction costs to encourage the replacement of aging distant-water fishing vessels. Critics also warn that support for overseas shipbuilding could increase as the evaluation score for domestic construction in the selection criteria is reduced.
According to Rep. Lee Yang-soo of the People Power Party, a member of the National Assembly’s Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee, of the 11 vessels supported by the Ministry of Oceans and Fisheries’ Distant-Water Fishing Vessel Safety Fund, two were built in China and one is scheduled to be built in Taiwan. A total of 16.68 billion won has been disbursed for the Chinese vessels, while 23.2 billion won is set to be provided for the vessel in Taiwan.
The companies that commissioned the vessels include Chamsun Food, Dongnam and Silla Trading. Chamsun Food and Dongnam were selected for fund support in 2022 and received around 16.6 billion won for two vessels they commissioned from Chinese shipyards. A total of 23.2 billion won will be provided for the vessel Silla Trading commissioned from a Taiwanese shipyard, with repayment over 12 years and no interest.
Since the Distant-Water Fishing Vessel Safety Fund first provided support in 2019, 54.9 billion won has been disbursed, with another 23.2 billion won planned. The total is 78.1 billion won, more than half of which is going toward support for shipbuilding in China and Taiwan.
The trend of generating orders for overseas shipyards is expected to intensify. Since 2023, the fund has assigned a 20% weighting to evaluation criteria related to domestic construction, but that weighting has been cut to 15% this year. In fact, Silla Trading, which commissioned a new vessel in Taiwan, was selected for support, edging out T&S Industry, which had been pursuing construction with a domestic shipbuilder. T&S Industry’s score on the qualitative assessment was lower; the weighting for that assessment rose from 20% to 40% this year.
The scale of support is also expected to grow. The Ministry of Oceans and Fisheries plans to pursue a fund-based modernization program for coastal and offshore fishing vessels next year, providing interest-free support for 60% of construction costs. The government’s budget proposal allocates 45.2 billion won for the program.
Sources in the shipbuilding and shipping industries say that domestic shipyards have limited dock capacity and cannot meet all demand for vessel construction, and that lower construction costs in China and Taiwan make building there unavoidable to some extent. Even so, critics argue that domestic shipyards should be given preference, at least in programs funded by taxpayers.
Rep. Lee said, “Since taxpayer money is being used to ease fishing companies’ interest burden, evaluation criteria that encourage domestic construction must work effectively,” and pointed out, “Domestic construction should be prioritized for support, and criteria should be established to rigorously assess the need whenever support is provided for construction overseas.”

[email protected] Kim Yun-ho Reporter