Abstract
As the importance of Chinese financial schemes in maritime business increases, and many issues on the ownership of the assets under the current Law remain obscured for international investors, this work argues that a streamlining to international practice is required; therefore, the ownership of the trust property under the shipping fund in China should be transferred to the trustee from the client. The trustee shall possess, employ, benefit, and dispose the trust property in his/her own name, which links up with China’s current property legislation, ship registration, and ship arrest regulations. The trust property under the shipping fund in China is independent of the fixed property or other management property of the trustee, the beneficiary, and the custodian. This gives full play to functional advantages of the trust system of the shipping fund, contributes to the expansion of financing channels in the shipping industry in China, guarantees the specialization and flexibility of shipping investment activities and the diversity of the investment subject, promotes development of China’s policies about the shipping industry and financial innovation, and boosts the realization of “The Strategy of National Revitalization Based on Marine Industry Development” and “The Belt and Road Initiatives” and construction of Shanghai International Shipping Center and International Finance Center.
Highlights
International seaborne trade is still growing and further development is expected (UNCTAD 2019)
As the importance of Chinese financial schemes in maritime business increases, and many issues on the ownership of the assets under the current Law remain obscured for international investors, this work argues that a streamlining to international practice is required; the ownership of the trust property under the shipping fund in China should be transferred to the trustee from the client
Shipping trust fund means a collective investment plan where capitals are raised by establishing trust fund contracts and issuing the fund share to constitute the trust fund to be invested in the shipping industry
Summary
International seaborne trade is still growing (see Figure 1) and further development is expected (UNCTAD 2019). Standing at a new starting point, China wants to become a powerful shipping country and build Shanghai into an international shipping center to realize the strategy of maritime silk road It has to be noted, the one-belt-one-road initiative is a pivotal strategic decision of China but an investment magnifier, a leverage for local growth of trade and development of infrastructure. Considering the international character of the industry, as well as the fact that a ship as legal asset, is subject to various jurisdictions, this work argues that the ownership of the asset, i.e., the property of a Chinese trust fund should be transferred from the client to the trustee, replicating international experience, as in the case of the German KG and Norwegian KS schemes (Clausius 2015; Johns and Sturm 2015; Mayr 2015; von Oldershausen 2015).
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