a yacht going astray in china

A yacht going astray in China (6)

I believe the answer is:

' china ' is the definition. (historical name for China) ' a yacht going astray in ' is the wordplay. ' going astray ' is an anagram indicator. ' in ' indicates putting letters inside. ' yacht ' anagrammed gives ' cathy '. ' a ' put into ' cathy ' is ' CATHAY '.

(Other definitions for cathay that I've seen before include "China - antique" , "Name for China in medieval times" , "Old name for China with a feline to start" , "China long ago" , "Ancient China" .)

Taiwan says China seizes fishing boat near its coast

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Reporting by Ben Blanchard and Yimou Lee; Additional reporting by Ananda Teresia in Jakarta, Bernard Orr in Beijing and Andrea Shalal and Kanishka Singh in Washington; Editing by Josie Kao, Clarence Fernandez and Deepa Babington

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Yimou Lee is a Senior Correspondent for Reuters covering everything from Taiwan, including sensitive Taiwan-China relations, China's military aggression and Taiwan's key role as a global semiconductor powerhouse. A three-time SOPA award winner, his reporting from Hong Kong, China, Myanmar and Taiwan over the past decade includes Myanmar's crackdown on Rohingya Muslims, Hong Kong protests and Taiwan's battle against China's multifront campaigns to absorb the island.

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Taiwan says China seized fishing boat near Chinese coast

Taiwan demands Beijing release crew and vessel seized from outside Taiwanese waters near Kinmen Islands.

Chinese coastguard officials have seized a Taiwanese fishing vessel and steered it to a port in mainland China, Taiwan has said, urging Beijing to release the boat and its six-member crew.

The move late on Tuesday came as China’s coast guard has stepped up patrols around Taiwan’s Kinmen islands after a series of deadly fishing accidents, one of which led to bitter blame-trading between the two sides.

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Taiwan’s coast guard said the Taiwanese boat was fishing for squid outside Taipei-controlled waters off the Kinmen islands, when it was boarded and seized by two Chinese maritime administration boats.

Kinmen sits next to the Chinese cities of Xiamen and Quanzhou is roughly five kilometers (3 miles) from the Chinese mainland.

The Taiwanese boat was operating during China’s no-fishing period, the coastguard said, adding that Taiwan will communicate with China and urge them to release the fishermen as soon as possible.

China’s Taiwan Affairs Office did not immediately comment.

China views democratically governed Taiwan as its own territory and has ramped up pressure on Taipei since President William Lai Ching-te took office in May, a man Beijing accuses of being a “separatist”.

Taiwan’s coastguard said it dispatched two patrol vessels “to try to rescue” the fishing boat, along with a third for assistance, but one was “blocked by” Chinese coast guard ships.

“We broadcast to the Chinese coast guard ship, demanding the immediate release of our fishing boat. The Chinese side also broadcast to us, asking not to interfere,” it said.

“To avoid escalating the conflict, we have decided to stop the chase,” the coast guard said, adding the fishing boat was taken to China’s Weitou port.

The boat had six crew onboard, including the captain and several migrant workers from Indonesia, according to Taiwan’s official Central News Agency.

Taiwan Coast Guard Administration Deputy Director-General Hsieh Ching-chin told reporters in Taipei that China should explain why it had seized the boat, and pointed out that in previous cases, fishermen had been released after paying fines when operating during China’s no-fishing season.

Taiwanese fishing boats need to raise their alert level and the coastguard will also strengthen its patrols, he added.

“The coastguard also calls on the mainland side not to use political factors to handle this situation,” Hsieh said.

Judha Nugraha, the director for citizen protection at Indonesia’s Ministry of Foreign Affairs, told the Reuters news agency that the country’s consulate general in Guangzhou will assist the detained Indonesians.

This is not the first time a Taiwanese fishing boat has been taken by Chinese authorities after operating in that country’s waters, an official said, speaking on condition of anonymity given the sensitivity of the situation.

A Taiwan official, who is familiar with the island’s security planning, told Reuters they have issued alerts to fishing and transport authorities around Taiwan to pay attention to “possible risks” amid frequent Chinese coastguard activities in the region, including near Japan and the Philippines.

It is not uncommon for Taiwan and China to detain each other’s trespassing fishing boats. So far this year, Taiwan has detained five such boats from China, Taiwan’s coastguard data shows.

Chinese maritime enforcement and coastguard ships have been regularly operating around Kinmen since February after two Chinese fishermen died trying to flee Taiwan’s coastguard.

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Taiwan Says It Was Warned by China to Not Interfere in the Detention of Taiwanese Boat Crew

Taiwan says China warned its coast guard against interfering in the detention of a Taiwanese fishing boat in what is seen as Beijing's latest attempt to assert its territorial claims in the Taiwan Strait

Chiang Ying-ying

Coastal Control Division Chief Liao Yun-Hung talks about a fishing boat intercepted by Chinese vessels Tuesday night, during a news conference in Taipei, Taiwan, Wednesday, July 3, 2024. Taiwan is calling for the release of a fishing boat after it was boarded by China''s coast guard and steered to a port in mainland China on Tuesday. (AP Photo/Chiang Ying-ying)

TAIPEI, Taiwan (AP) — Taiwan said Wednesday that China warned its coast guard against interfering in the detention of a Taiwanese fishing boat, in what was seen as Beijing's latest attempt to assert its territorial claims in the Taiwan Strait.

The incident comes as tensions have risen following the election of Taiwanese President William Lai Ching-te, whose party rejects unification with the mainland, and an apparent threat by Beijing to execute supporters of Taiwanese independence.

Liu Dejun, a spokesperson for China's coast guard, said Wednesday that the Taiwanese fishing boat was detained on suspicion of illegal fishing. Liu said the boat violated a fishing moratorium in Chinese waters by trawling in a forbidden zone. Liu said the boat also was using nets that were finer than allowed by Chinese law.

Taiwan's coast guard repeated its call for the release of the boat and its crew members, who were taken from waters off the Taiwanese-controlled island of Kinmen just off the Chinese coast on Tuesday night. That call was complicated by China’s refusal to communicate with Taiwan’s current government.

A spokesperson for Taiwan's coast guard, Hsieh Ching-chin, said the boat was not in Chinese waters when it was boarded by Chinese agents and steered to a port in the Chinese province of Fujian.

“First, we call on the (Chinese side) to provide an explanation, and second, to release the boat and its crew,” Hsieh said.

The Dajinman 88 was intercepted by two Chinese vessels and Taiwan dispatched three vessels to help, but one that got close to the fishing boat was blocked by three Chinese boats and told not to interfere, the Taiwanese coast guard said in an earlier statement.

Hsieh said four other Chinese boats joined in the operation, an indication of the massive expansion in recent years of China's navy, coast guard and maritime militia.

The pursuit was called off to avoid escalating the conflict, Hsieh said.

The boat has a captain and five crew members, according to Taiwan’s official Central News Agency. The crew are Taiwanese and Indonesian.

The vessel was just over 20 kilometers (12 miles) from Jinjiang in mainland China when it was boarded, Taiwanese authorities said.

China claims self-governing Taiwan is its territory and says the island must come under its control.

Fishermen from both Taiwan and China regularly sail the stretch of water near Kinmen, and tensions have risen as the number of Chinese vessels has increased.

In February, two Chinese fishermen drowned while being chased by Taiwan’s coast guard off the coast of Kinmen, prompting Beijing to step up patrols.

China has been increasing military actions around Taiwan's main island as well as the island groups of Kinmen and Matsu, which lie within sight of the Chinese coast. It also dispatches warplanes and navy ships daily around the island and holds military exercises, seen as rehearsals for a potential blockade or invasion.

Taiwan's Defense Ministry said 20 Chinese People's Liberation Army Air Force planes crossed the median line of the Taiwan Strait between Tuesday and Wednesday.

Last month, China passed new injunctions threatening to hunt down and potentially execute “die-hard Taiwan independence separatists.” In response, Taiwan warned its citizens to avoid visiting the mainland and the semi-autonomous Chinese cities of Hong Kong and Macao.

On Tuesday, a spokesperson for the Chinese Cabinet’s Taiwan Affairs Office said the threat only affects a hard-core minority of Taiwanese, and accused Taiwan's governing Democratic Progressive Party of “willfully misinterpreting” the action in an attempt to spread fear.

Taiwanese citizens overwhelmingly favor the island's current de facto independence status, despite military threats and diplomatic isolation imposed by Beijing.

Taiwan, a former Japanese colony, rejoined China after World War II but split away in 1949 as the Nationalists under Chiang Kai-shek were were defeated on the mainland by Mao Zedong’s Communists. No peace treaty has ever been signed, even as ties including direct flights between the sides have burgeoned.

Associated Press writers Dake Kang in Beijing and Didi Tang in Washington contributed to this report.

Copyright 2024 The  Associated Press . All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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A new dawn: Inside China's rising superyacht market

China emerged as the great new hope for superyachting after the 2008 crash. One spectacular false dawn later, could it finally be taking off?

If 1421 was the zenith of China’s long yachting history, when legendary eunuch admiral Zheng He purportedly led his “treasure fleet” of hundreds of junks around the world (in the process, according to one historical account, discovering America 70 years before Columbus), 2013 could be considered the nadir. For that was when President Xi Jinping – only months into office – began a crackdown on “tigers and flies”, a euphemism for those government officials and businessmen (the genres blur in China) whose greed and corruption had begun to stir public anger.

Part of his anti-corruption crusade was an eye-watering 44 per cent import tax on luxury goods and a clampdown on lavish hospitalities and personal spending. Ostentatious symbols of wealth – fast cars, lavish banquets, his-and-hers diamond-studded Rolexes, Learjet jaunts, $20,000 gift-wrapped bottles of Rémy Martin and 50-year-old Moutai rice wine, and, of course, superyachts – became highly conspicuous and drew the wrath of the Communist Party’s Central Commission for Discipline Inspection.

“We must uphold the fighting of tigers and flies at the same time, resolutely investigating law-breaking cases of leading officials and also earnestly resolving the unhealthy tendencies and corruption problems which happen all around people,” Xi said at the time. Dozens have been investigated, arrested and jailed, including top ministers – so many the Qincheng maximum security prison in Beijing for disgraced senior Communist Party officials ran out of cells last year, according to credible reports. Orders for status-symbol trappings dropped off a cliff; Western luxury retailers and manufacturers saw exports nosedive.

The yacht market was especially devastated. It’s far harder to hide a superyacht than a diamond ring or a Porsche, after all. Prior to the crackdown, China’s boating sector had been inching its way towards some kind of momentum after its once illustrious sailing heritage, having been all but erased along with much of the country’s four millennia of history during Chairman Mao Zedong’s Cultural Revolution, was resurrected for the 2008 Beijing Olympics.

Then the financial crisis struck the West, and China, with its seemingly armour-plated economy and near-double-digit growth, emerged as the great Eastern hope for leading yacht brands. Into the Chinese market sailed an international fleet of brokers and builders. The 14,500-kilometre coastline, stretching from the Bohai Gulf in the chilly north to the Gulf of Tonkin in the tropical south, was eyed as a prime playground for China’s new billionaire class, which grew to 338 individuals in 2017, according to data company Wealth-X. Estimates put the number of millionaires in the country at more than 1.5 million. China was about to go boating again.

Exhibitions were hastily organised, rendezvous booked and property developers broke ground on scores of prestige marinas, charging top-dollar membership and mooring fees, many starting at ¥1 million (£110,000) a year. Local boatyards followed, laying keels of copied foreign and home-grown designs, some in joint ventures with overseas shipyards, many without.

The image-conscious Chinese super-rich responded in kind and started buying foreign-branded trophy boats at up to three times the market price, and moored them in the expensive marinas. Cost was not an issue. What mattered was so-called “face” or mianzi: the projection, and protection, of one’s reputation and social standing. In the West we call it ego.

A 2012 report by the China Cruise & Yacht Industry Association found that there were 3,000 yachts of all sizes in China, and estimated that this figure would rise to 100,000 by 2020, in a market worth €10 billion. The international boating industry was washed along by this giddy, irrational wave of hyperbole. Across the board, orders for smaller superyachts went from zero – zoom! – skywards.

Local yards benefited. After years of being ignored by the domestic market, in 2010 Chinese yard Heysea received eight orders for its 82 model before it had even finished the mould. A year after the financial crash in the West, meanwhile, China recorded sales of ¥4.15 billion (£450 million), according to local media reports. “After 2008, the yacht market took off because the West’s financial crisis had negligible impact in China,” says Sunseeker Asia’s Gordon Hui from his office in Hong Kong. Jona Kan, from Australian yard SilverYachts , adds that demand suddenly grew for superyacht dayboats on which Chinese businesspeople could entertain clients.

But Icarus had flown too close to the sun. Within a couple of years, the world’s financial woes started to penetrate China’s economic model. Jobs were slashed and inflation was on the rise. Yet for the wealthy Communist Party cadres and their tycoon chums, it was business as usual. The restive masses looked expectantly – and threateningly – to Beijing to bring such conspicuous consumption to heel. President Xi responded with a dragnet that claimed scores of high-profile scalps, sending the message loud and clear: in-your-face luxury would no longer be tolerated.

Brokers’ phones stopped ringing, builders’ order books took a hit and showrooms became wastelands. All of those contacted by Boat International for this article echoed almost verbatim the sentiment expressed by Sunseeker’s Hui: “After more than three years of the anti-graft policy, the Chinese boating market has come to a halt, with a 95 per cent drop-off in sales. It has been all but dead since 2015.”

Sunseeker , bought in 2013 by China’s fourth-richest man, Wang Jianlin, has closed two of its three dealerships in mainland China. At one point, China accounted for 15 per cent of Sunseeker’s global sales. “Now it’s less than five per cent,” says Hui. Several Chinese yacht builders have gone bankrupt as hefty value added tax and duties on imported parts such as engines rendered operations unviable. Marinas have battened down the hatches, slashing their prices by half to avoid the fate of Xiangshan Yacht Club in Fujian province; billed as Asia’s largest marina when it opened, it went bust in 2014.

Yet to solely blame the anti-corruption drive and the global financial crash for China’s slumbering boating market is misguided. Prior to Xi’s clean-up, there had been attempts to build a culture of private boating after the former leader Deng Xiaoping launched economic reforms in 1981. But those attempts failed, says Hong Kong-based yacht broker Mike Simpson, of Simpson Marine, one of the region’s biggest boat dealers. Simpson agreed the import tax on foreign boats has had a near fatal impact, but he says there were already major hurdles to developing the fledgling market. “We have to remember China is relatively new to boating,” says Simpson, who set up his company in Hong Kong in 1983. “It’s been developing in fits and starts. An obvious curb on its development has been the import ban on second-hand boats, which was there before the luxury goods tax.”

He adds: “The last two to three years have been pretty desperate. I don’t think anyone has made money. Everyone’s been spending money just to stay in business in China over the past few years.”

The lack of a boating culture is also commonly cited as one reason that’s holding back the Chinese market. In the West, yachting is all about relaxing fun in the sun, a weekend jaunt from one marina to a secluded cove or island, or for sailing boat owners, the thrill of stealing an opponent’s wind during a regatta. In China, owning a yacht has been all about the optics, or “face”, and viewed by the public as the exclusive preserve of the ultra-rich. But even among this demographic, interest is limited. According to Wealth-X, just two per cent of all Chinese UHNW individuals own or even have an interest in yachting, compared to 6.7 per cent globally.

“The perception among the Chinese is that boating is for the very wealthy,” says Rocky Wang, chief representative of Burgess in China. “Many Chinese have yet to grasp what boating is all about. Boating culture remains in its very early stages. Yachting is very new to them. Those Chinese who think about buying yachts continue to do so with mainly a business objective in mind. Buyers are business owners, investors and entrepreneurs, who use the yachts as dayboats to entertain, rarely overnighting on board.”

Of the 200 yachts in the southern boom city of Shenzhen, where Deng Xiaoping launched China’s opening up and reforms half a century ago, about 70 per cent never leave the yacht club. Instead, they serve as venues to host wealthy clients and government officials; one pontoon legend has it that some boats were bought without engines because their owners never entertained the idea of going to sea.

In China, building a $30 million marina with a plush clubhouse and spa is the easy part. Not so easy is attracting the essential supplemental services: repair yards and chandlers, navigation aids, charts, a coastguard service willing to assist the stranded sailor, sail training schools and so on. A lack of trained Chinese crew is also a major problem. In China there are an estimated 60,000 sailors, mostly of school age, attending small sailing centres and learning in dinghies. Crews experienced enough to handle a 60-metre-plus seagoing vessel are a rarity. “Chinese yacht owners must, therefore, import foreign crews with the expertise to maintain and sail boats, and this comes with visa application headaches,” says Simpson.

Then there is the maddening red tape. China guards its coastal waters like a hawk; try to sail a nautical mile off Qingdao beach or a cable or two up the coast from Sanya and you’ll have patrol boats stuffed to the gunnels with uniformed boarding parties bearing down on you demanding papers; a day’s sail is treated like an invasion or a desperate escape with state secrets.

“It’s true,” concedes William Ward, CEO of the biannual round-the-world Clipper Race, which during its last edition stopped twice in China, in Sanya in the south and Qingdao in the north. “The government protects the inshore waters as it would an inland military installation. It’s overbearing, there’s too much red tape, and you just don’t need that. You need to be able just to hop on your boat, slip your lines and head out for some safe fun and relaxation, just as we can in the UK, or in the Med and everywhere else,” he says.

Then there’s China’s geography. Part of the appeal of cruising is exploring idyllic archipelagos or mooring off a chic seaside town. Only in the south, around the island of Hainan, can you find good cruising with accommodating marinas. Even then, as Ward recently experienced, just heading out for a day’s jaunt demands official clearance to slip your lines, which may or may not be granted.

Little wonder those Chinese who own a superyacht, or are still in the market for one, seek to moor their pride and joy outside China, in places like Thailand, Malaysia, Singapore and Australia, while the ultra-wealthy look to the US and the Med.

Not for the first time, there might be signs of a new dawn appearing for China’s boating market. In April, the Pride Mega Yachts shipyard in Yantai, China, rolled out the spec-built 88.5 metre superyacht Illusion Plus , which later appeared at the Monaco Yacht Show. She’s now listed for sale , asking $145 million. If she sells well, it will be a sign of faith in Chinese yacht building.

Chinese conglomerates are once more seeking to own international superyacht brands. China Zhongwang, the world’s second-largest producer of industrial aluminium extrusion products, recently acquired a controlling interest in Australia’s SilverYachts, which builds high-speed, fuel-efficient superyachts from high-grade aluminium. The yard’s commercial director, Jona Kan, says the boatbuilder will soon announce the acquisition of a shipyard in the Pearl River Delta.

Sunbird, a Chinese conglomerate with five shipyards including a large commercial facility, added IAG Yachts to its varied portfolio in 2015, and turned out to solid reviews the 42.7 metre  King Baby , the largest fibreglass motor yacht ever produced in China.

Heysea Yachts, founded in 2007 and one of China’s largest yacht builders, was a new entry in the Boat International Global Order Book’s Top 20 builders in 2018 and holds its place in this year’s report. Chairman Allen Leng says the company is seeing more interest from domestic buyers because it is adapting to local tastes, by placing the galley down below and including more living and entertainment space, with fewer cabins. “There is an increased number of Chinese clients who better understand the culture of boating and the lifestyle it offers; that boat ownership is more than having a floating platform for business and to boost one’s image,” says Leng. “More Chinese customers are accepting that China-made yachts offer quality and the same after-sales service as foreign brands. We’re also noticing a demand for smaller yachts, which shows the link between sailing and sport and leisure, and that boating is not just a rich person’s pursuit.”

Horizon Yachts says its product range, including new projects such as the FD series, are proving popular with Chinese clients, who are becoming more sophisticated in their tastes. “For example, a buyer in Shanghai or in Sanya will moor their yacht in a yacht club and let the club manage it. In the past five years, we have delivered a 120ft [36.5 metre] superyacht and 145ft [44.2 metre] superyacht, both to clients in Shanghai,” says Horizon Yachts’ chief marketing officer, Lily Li.

Simpson Marine’s Mike Simpson estimates that around 50 per cent of yachts being bought in China are now locally built. “The standard is improving,” he says. “Sometimes you have to do a double-take when you see yachts coming: you think it’s a well-known foreign brand. Then you look again and it’s actually a locally made boat.”

Sunseeker’s Hui also expresses modest optimism. “I think the market overall is getting better, albeit slowly,” he concedes. “I can say 70 per cent of our 2015 to 2018 customers are mainland Chinese with overseas-listed companies. But their boats are all outside China.”

Grassroots sailing and crew training recently received a much-needed boost. In April, the UK’s then deputy ambassador to China, Martyn Roper, and the president of the Chinese Yachting Association, Qu Chun, signed deals to open three training centres to bring Chinese seamanship up to British standards. The centres will offer the UK’s Royal Yachting Association courses. In the UK, seven per cent of the population goes boating. If the same percentage could be replicated in China, that would mean 80 million people taking confidently to the water.

Simpson says a new initiative called the Greater Bay Area development scheme is seeking to unify nine mainland coastal cities to allow yachts licensed in Hong Kong and Macau to cruise in the good southern cruising areas around Hainan without paying a hefty tax. And there is quiet and determined diplomacy afoot calling for Beijing to relax and standardise coastal regulations. Ward, the Clipper Race CEO, says he has been speaking to officials at city and provincial levels who understand the benefits of rationalising China’s sailing industry and its associated tourist trade. “I have spoken with many officials and they get this point. They understand the [stifling red tape] situation, and they’re passing these concerns up to Beijing, that leisure sailing is a different culture and is good for local and regional business,” he says.

There are signs of a cultural shift, too. At the 2018  Shanghai Boat Show , many of the exhibitors were proposing something different – more accessible yachting, with small fishing boats and cruisers standing cheek by jowl with the bigger craft, says Delphine Lignières, co-founder of the Hainan Rendez-Vous. “Contrary to myth, many Chinese enjoy watersports, including sailing and fishing. What I have seen now is more and more people boating on inland freshwater lakes in smaller-sized boats.

“That’s where I see the market developing this time, with smaller recreational boats being bought for use on lakes, rivers and estuaries. This will help establish a boating culture, and over time, the boats will again get bigger and bigger. And not in such a conspicuous way.”

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• Copy story information for sharing Unmasking China's invisible fleet: For years, no one knew why dozens of battered wooden "ghost boats" were routinely washing ashore along the coast of Japan. Now, an investigation by the journalism organization The Outlaw Ocean Project has revealed that China is sending an armada of industrial boats to illegally fish in North Korean waters, displacing smaller North Korean boats.

Unmasking China's invisible fleet

Satellite data exposing illegal fishing in North Korean waters reveals breadth of China's ambitions at sea

By Ian Urbina of The Outlaw Ocean Project, for CBC News

July 23, 2020

This story is a part of a documentary series produced in collaboration with NBC News by The Outlaw Ocean Project , a non-profit journalism organization based in Washington, D.C., that focuses on human rights, labour and environmental crimes at sea.

For years, no one knew why dozens of battered wooden "ghost boats" were routinely washing ashore along the coast of Japan, often with the bodies of starved North Korean fishermen reduced to skeletons.

An investigation by the journalism organization The Outlaw Ocean Project based on satellite data collected over the last two years has revealed, however, what marine researchers now say is the most likely explanation: China is sending an armada of industrial boats to illegally fish in North Korean waters, displacing smaller North Korean boats, forcing them farther out to rougher seas, and spearheading a decline in once-abundant squid stocks of more than 70 per cent.

The Chinese vessels — close to 800 last year — appear to be in violation of UN sanctions that forbid foreign fishing in North Korean waters in the Sea of Japan, also known as the East Sea. The sanctions, imposed in 2017 in response to the country's nuclear tests, were intended to punish North Korea by not allowing it to sell fishing rights in exchange for valuable foreign currency. (Canada is one of the countries helping to enforce those sanctions.)

The number of ships newly revealed in the investigation comprises roughly a third the size of the entire Chinese distant-water fishing fleet. The public and commercial satellite data was analyzed by Outlaw Ocean, Global Fishing Watch and researchers and academics from the U.S., South Korea and Japan. It was also peer-reviewed and published in the academic journal Science Advances.

"This is the largest known case of illegal fishing perpetrated by a single industrial fleet operating in another nation's waters," said Jaeyoon Park, a data scientist from Global Fishing Watch , which tracks commercial fishing vessels around the world.

Presented with the findings, the Chinese Ministry of Foreign Affairs said that, "China has consistently and conscientiously enforced the resolutions of the Security Council relating to North Korea." The ministry said China has "consistently punished" illegal fishing.

It is unclear whether the North Korean government has authorized the Chinese ships. However, when South Korean Coast Guard authorities have boarded and inspected some of the ships as they traversed South Korean waters on their way to North Korean fishing grounds, the Chinese captains have presented fishing permits signed by North Korean authorities.

An elusive but expanding fleet

In March, two countries anonymously complained in a report to the United Nations about China's violations of the sanctions and provided satellite imagery of Chinese ships fishing in North Korean waters and testimony from Chinese fishing crew who said they had alerted their government of their plans to fish in North Korean waters.

Chinese officials dismissed this report, claiming the allegations were unfounded and involved scant few boats.

The recent revelations raise thorny questions about the consequences of China's ever-expanding role at sea and the lack of governance of the world's oceans.

Estimates of the total size of China's global fishing fleet vary widely. By some calculations, China has anywhere from 200,000 to 800,000 fishing boats, accounting for nearly half of the world's fishing activity. The Chinese government says its distant-water fishing fleet, or those vessels that travel far from China's coast, is roughly 2,600 vessels, but other research, such as this study by the U.K. think-tank ODI, puts the number closer to 17,000, with many of these ships operating undetected, in part by turning off the transponders that allow satellites to track them.

By comparison, the United States distant-water fishing fleet has fewer than 300 vessels.

China is not only the world's biggest seafood exporter. The country's population also accounts for more than a third of all fish consumption worldwide. Having depleted the seas close to home, the Chinese fishing fleet has been sailing farther afield in recent years to exploit the waters of other countries, including those in West Africa and Latin America, where enforcement tends to be weaker as local governments lack resources or inclination to police their waters. Most Chinese distant-water ships are so large that they scoop up as many fish in one week as local boats from Senegal or Mexico might catch in a year.

Many of the Chinese ships combing Latin American waters target forage fish, which is ground into fishmeal, a protein-rich pelletized supplement fed to aquaculture fish. The Chinese fleet has also focused on shrimp and the now endangered totoaba fish, which is much prized in Asia for the alleged medicinal properties of its bladder and can sell for between $1,400 and $4,000 per fish.

Nowhere at sea is China more dominant than in squid fishing, as the country's fleet accounts for 50 to 70 per cent of the squid caught in international waters, effectively controlling the global supply of the popular seafood. Half of the squid pulled from the high seas by Chinese fishermen is exported to Europe, north Asia and the U.S.

To catch squid, the Chinese typically use trawling nets stretched between two vessels, a practice criticized by marine conservationists because it results in a lot of fish inadvertently and wastefully killed. Critics also accuse China of keeping high-quality squid for domestic consumption, exporting lower-quality products at higher prices, overwhelming vessels from other countries in major squid breeding grounds, and influencing international negotiations about conservation and distribution of global squid resources for its own interest.

Subsidizing squid

China's global fishing fleet did not grow into a modern behemoth on its own. The government has robustly subsidized the industry, spending billions of yuan annually. Chinese boats can travel so far partly because of a tenfold increase in diesel fuel subsidies between 2006 and 2011, after which Beijing stopped releasing statistics, according to a Greenpeace study.

For over a decade, the Chinese government has helped pay to construct bigger, more advanced steel-hulled trawlers, even sending medical ships to fishing grounds to enable the fleet to stay at sea longer. The Chinese government supports the squid fleet in particular by providing it with an informational forecast of where to find the most lucrative squid stocks, using data gleaned from satellites and research vessels.

On its own, distant-water squid fishing is a money-losing business, according to research by Enric Sala, founder and leader of the U.S. National Geographic Society's Pristine Seas project. The sale price of squid typically does not come close to covering the cost of the fuel required to catch the fish, Sala found.

Still, China is hardly the worst offender when it comes to such subsidies, which ocean conservationists say, through over-capacity and illegal fishing, are a major reason that the oceans are rapidly running out of fish. The countries that provide the largest subsidies to their high-seas fishing fleets are Japan (20 per cent of the global subsidies) and Spain (14 per cent), followed by China, South Korea, and the United States, according to Sala's research.

More recently, the Chinese government has stopped calling for an expansion of its distant-water fishing fleet and released a five-year plan that restricts the total number of offshore fishing vessels to under 3,000 by 2021.

Other attempts to rein in this fishing fleet, however, have been slow. Though China has modernized the industry's fishing gear, ship engines, radar and offshore cold storage, the government's efforts at regulation have not kept pace. Imposing reforms and policing them is difficult partly because laws are lax, much of the workforce on vessels is illiterate, many ships are unlicensed and lack the unique names or identifying numbers needed for tracking, and the country's fishery research institutions often refuse to standardize or share information domestically or abroad.

WATCH | Follow Ian Urbina of The Outlaw Ocean Project as he and Global Fishing Watch track Chinese squid ships in the Sea of Japan, or East Sea:

Still, more than seafood is at stake in the present size and ambition of China's fishing fleet. The country's commercial fishermen often serve as de-facto paramilitary personnel whose activities the Chinese government can use to further its geopolitical aims. This ostensibly private armada helps assert territorial domination, pushing back fishermen or governments that challenge China's sovereignty claims, which encompass nearly all of the South China Sea.

"What China is doing is putting both hands behind its back and using its big belly to push you out, to dare you to hit first," Huang Jing, the director of the Center on Asia and Globalization at the Lee Kuan Yew School of Public Policy in Singapore.

Chinese fishing boats are notoriously aggressive and often shadowed, even on the high seas or in other countries' national waters, by armed Chinese Coast Guard ships.

Swarming the zone

With competing historical, territorial and even moral claims from China, Vietnam, Philippines, Malaysia, Brunei, Taiwan and Indonesia, the South China Sea is among the most hotly contested regions in the world. Aside from fishing rights, the interests in these waters stem from a tangled morass of national pride, lucrative subsea oil and gas deposits and a political desire for control over a region through which a third of the world's maritime trade flows.

In the South China Sea, the Spratly Islands have attracted most attention as the Chinese government has built artificial islands on reefs and shoals in these waters, militarizing them with aircraft strips, harbours and radar facilities. Chinese fishing boats bolster the effort by swarming the zone, intimidating potential competitors, as they did in 2018, suddenly dispatching more than 90 fishing ships to drop anchor within several miles of Philippines-held Thitu Island, immediately after Manila began modest upgrades on the island's infrastructure.

And yet, clashes over fishing grounds involving the Chinese are not limited to the South China Sea. Japan and China are at odds over the Senkaku Islands, known in Chinese as the Diaoyu, or "fishing" islands, and the Argentine Coast Guard has opened fire on Chinese fishing vessels entering its waters.

From North Korea to Mexico to Indonesia and South America, incursions by Chinese fishing ships are becoming more frequent, brazen and aggressive. It hardly takes a great feat of imagination to picture how a seemingly civilian clash could rapidly escalate into a bigger military conflict.

About the author and the project

Ian Urbina is a former investigative reporter for the New York Times whose work has also appeared in The Atlantic, The New Yorker and elsewhere . He is the director of The Outlaw Ocean Project , a non-profit journalism organization based in Washington, D.C., that focuses on reporting about environmental and human rights crimes at sea. Some of his investigative work on this subject was published last year in his book The Outlaw Ocean: Journeys Across the Last Untamed Frontier . Follow him at @ian_urbina on Instagram and Twitter or @ianurbinareporter on Facebook .

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Taiwan says China’s coast guard has detained a Taiwanese fishing vessel and demands its release

FILE - A fisherman leaps to his boat docked in harbor in Toucheng, north eastern Taiwan, Aug. 21, 2013. Taiwan said the Chinese coast guard boarded a Taiwanese fishing boat Tuesday, July 2, 2024, before steering it to a port in mainland China, and demanded that Beijing release the vessel. (AP Photo/Wally Santana, File)

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TAIPEI, Taiwan (AP) — Taiwan said the Chinese coast guard boarded a Taiwanese fishing boat Tuesday before steering it to a port in mainland China, and demanded that Beijing release the vessel.

The Tachinman 88 was intercepted by two Chinese vessels Tuesday evening near the Kinmen archipelago, which lies a short distance off China’s coast but is controlled by Taiwan, Taiwanese maritime authorities said in a statement.

Taiwan dispatched three vessels to rescue the Tachinman 88, but the one that got close to the fishing boat were blocked by three Chinese boats and told not to interfere, the statement said. The pursuit was called off to avoid escalating the conflict after Taiwan’s maritime authorities detected that four more Chinese vessels were moving closer, the statement added.

“The Coast Guard calls on the mainland to refrain from engaging in political manipulation and harming cross-strait relations, and to release the Tachinman ship and crew as soon as possible,” the statement read.

The boat had six crew onboard, including the captain and five migrant workers, according to Taiwan’s official Central News Agency. The vessel was just over 20 kilometers (12 miles) away from Jinjiang in mainland China when it was boarded, Taiwanese authorities said.

China claims self-governing Taiwan as its territory and says the island must come under its control. The Chinese military regularly sends warplanes and ships toward the island and staged a large exercise with dozens of aircraft and vessels in May.

Fishermen from both Taiwan and China regularly sail the stretch of water near the Kinmen archipelago, which has seen a rise in tensions as the number of Chinese vessels — including sand dredgers and fishing boats — have notably increased in the area.

In February, two Chinese fishermen were drowned while being chased by Taiwan’s Coast Guard off the coast of Kinmen, prompting Beijing to step up patrols in the waters.

By SuperyachtNews 11 May 2021

China and Hong Kong: superyacht market dynamics

As china’s billionaire population hits record numbers, the industry is still trying to grow this budding market….

There are few geographical markets that present the superyacht industry with the same opportunity for growth as the Chinese market. Still at a relatively early stage of yachting development, in terms of domestic infrastructure and ownership, China certainly has a large, and growing, pool of potential superyacht buyers. Knight Frank’s 2021 edition of The Wealth Report recently set out its list of top-10 risers – the 10 countries that saw the biggest increase in their UHNWI population in 2020 – revealing that China saw the largest increase, at 16 per cent.

Furthermore, according to Hurun Report’s Hurun Global Rich List 2021 , China has outpaced the United States to become the first country in the world with more than 1,000 billionaires. The publication reveals that, at the beginning of 2021, China had 1,058 billionaires with their wealth denominated in US dollars. “Despite the trade war with the US, China adds 259 billionaires and becomes the first country with more than 1,000 known billionaires, surpassing other countries including the US, India and Germany,” the report says.

In light of the region’s growing billionaire population, the recently-published The Pacific Superyacht Report   explores the current dynamics at play in the Chinese superyacht market from a buyer perspective, as well as the potential that China and Hong Kong present to the superyacht industry.

“There is definitely an upward trend in the superyacht market in China, as the wealth of the mainland Chinese increases,” says Joe Yuen, of Lodestone Yachts. “The Chinese tend to purchase new superyachts from production yacht dealers, but now you see more and more Chinese buying semi-custom or full-custom superyachts through professional yacht brokers. The production yacht dealers have done well with their marketing in the region, and you are also beginning to see larger semi-custom superyachts cruising in the harbours.” 

When talking about the Chinese superyacht market, it is important to distinguish between the Hong Kong market and mainland China market. As Rock Wang, Feadship’s Asia representative, explains, “Hong Kong is already a very mature yachting market, so there isn’t much potential for growth. While mainland China is already very active, it will be growing rapidly in the next 10 years.” 

The reasons for these two markets being at two very different stages of yachting development are well documented. While Hong Kong may have a longer history of a yachting culture than mainland China, the most obvious barrier to the growth of the domestic Chinese market is its weighty import duties on foreign yachts, compared to tax-free Hong Kong.

“The matter of taxation has been a major limiting factor,” says Mike Simpson, managing director of Simpson Marine. “There is a very high import tax on yachts, it has been 43.65 per cent, but that has recently been reduced to 38.1 per cent on motoryachts and 35.6 per cent on sailing yachts over 8m [at the time of writing]. The tax has been a big deterrent for a lot of people – when you are spending a large amount of money to buy a yacht, no one is very happy about spending nearly 50 per cent more for the privilege of bringing it into, and flagging it in, China.”

For Simpson, however, the biggest barrier to the growth of the domestic market is the perception that superyachts in China are going to attract a lot of attention. “Currently there are only about 30 yachts over 30m in southern China altogether (excluding Hong Kong), so any new yacht is going to stand out, and this is not always very welcome. Normally, the wealthy try and keep a low profile,” he continues. “There is plenty of wealth in China, but there is a fear of attracting attention by any obvious displays of wealth.”

“There is plenty of wealth in China, but there is a fear of attracting attention by any obvious displays of wealth...”

In both the Hong Kong and mainland China markets, buyer habits differ depending on the size sector they are buying into, and whether they are buying for domestic or overseas use. According to Wang, because the majority of marinas in Hong Kong offer berthing up to 35m, both the 30-35m new-build and brokerage markets in Hong Kong are very active, with most clients keeping their boats in Hong Kong and using them as day or weekend boats for local cruising. For the larger size sectors, however, clients tend to enjoy their boats overseas due to the berthing limitations of Hong Kong’s marinas.

Wang observes further intricacies in the 35m-plus sector depending on size range, with Hong Kong clients generally preferring to buy new over second-hand. “Buying a yacht is more expensive in the 35-60m size range, so clients spending this much money tend to want something new,” he explains. “About 60-70 per cent of these clients will choose a new build. Most clients also don’t want to wait too long for their yacht, but thankfully many shipyards offer production or semi-custom models in this size range, which shortens build time.” 

According to Wang, this preference for ‘something new’ augments even further in the 60m-plus market. “The vast majority of clients want a new-build when buying a yacht over 60m,” he adds. “Every yacht of this size has a very specific personality and, because of this, many of the clients I have worked with feel that a second-hand yacht of this size does not and would not belong to them.”

In terms of the market in mainland China, there are other dynamics at play. With government restrictions on the import of second-hand yachts older than one year, as well as a lack of brokerage agencies and surveyors to advise clients on second-hand purchases, there is virtually no second-hand brokerage activity within China, even in the 30-35m sector, where berthing is easier.

However, the mainland Chinese ownership in the 35m-plus market is similar to that of Hong Kong. “Except that the mainland Chinese prefer to buy new builds even more than Hong Kong clients,” he says. “It is the Chinese mentality; if they are spending 20-30 million euros, they want something new.”

In terms of market potential for the superyacht industry, the Chinese market is huge in the same way that the country’s population is huge and, in light of the country’s rapidly growing population of UHNWIs, Wang is very optimistic about the future potential of the market in mainland China. He puts it simply: “It’s human nature. When you have a lot of money, you want to enjoy life and yachting is one of the best ways to enjoy life.”

“From the crew to the brokers and designers, every sector of this industry is lacking Chinese professionals...”

Despite this optimism, Wang believes that there are certain changes that could be made in order to help stimulate growth. One barrier is the scarcity of Chinese representation in the industry. “From the crew to the brokers and designers, every sector of this industry is lacking Chinese professionals,” he says. “As an international community, we should look to find Chinese talent. If there were just 15 to 20 Chinese brokers, the market would change. Shipyards also need to have marketing material in Chinese because the majority of Chinese clients feel more comfortable reading Chinese than English. It is something very basic that the industry can do today that will have a significant impact in the future.”

Simpson agrees that a lack of qualified local crew is certainly a limiting factor to the growth of the Chinese market. “Owners accept that they will have to hire qualified foreign crew for now, but many Chinese owners don’t speak English and they would rather have at least some crewmembers who can communicate with them in their own language,” he says, adding that optimism lies in the MCA-approved Galileo Maritime Academy, Thailand. The Academy offers training courses to the Asia region, which will help to get more local crew trained up and qualified to work on superyachts in the future.

More infrastructure to attract visiting yachts would also help to give the superyacht industry more visibility in China, and possibly attract the attention of qualified buyers. “When there are more marinas and professional crew, this will help increase the popularity of superyachts,” concludes Yuen. “The Chinese government is also promoting various types of tourism, including yacht tourism, in the Free Trade Zone of Hainan Island and The Greater Bay Area. I hope this will bring more charter yachts to the Far East.”

This article appears in full in the recently-published The Pacific Superyacht Report . For complimentary digital access to the magazine, please click here.

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China’s Yacht Market: Opportunities and Challenges for Foreign Players (updated)

China appears well-positioned to become a prominent yacht market, given its 14,484km-long coastline and a class of millionaires expected to cross the 20 million mark by the mid-2020s. Despite this, however, sales have been disappointing i n the last 3-5 years due to high import tax and the inability of manufacturers to respond to Chinese client demands. In this article, we provide a general overview of China’s yacht market and discuss the differences in business outlook according to key stakeholders, ranging from optimism over market growth potential or concerns about limited domestic prospects . We also discuss the recent entry of Chinese capital in the industry and how Chinese companies are manufacturing for non-China markets. Finally, we look at opportunities for foreign investors in China’s boat market, including prospects for small and mid-cap companies, and showcase the success cases of Italian companies.

UPDATE: O n August 18, 2 0 22, the Ministry Industry and Information Technology (MIIT), together with the National Development and Reform Commission (NDRC), the Ministry of Finance (MOF), the Ministry of Transport (MOT) , and the Ministry of Culture and Tourism (MCT), jointly released on the Guidelines on Accelerating the Development of Cruise and Yacht Equipment and the Industry (Guidelines) , clarifying China’s roadmap for the development of the yacht industry through 2025. More details are provided below .  

While North America and Europe remain in the lead as the world’s largest yacht consumers, the Asia-Pacific region has rapidly become one of the fastest-growing yacht markets.   The yacht market in Asia has been skyrocketing post-pandemic, with increased purchases and a growing interest in sailing – sparking what industry experts define as a ‘boom’. On the one hand, countries like Taiwan and China have increased their market share with new builds by locally-based shipyards. However, boat sales to the region are also on the rise.

As of 2021, Asian ownership of superyachts over 40 meters in service accounted for 5.8 percent of the global superyacht fleet. The number of Asian-owned yachts has progressively increased, from 91 at the beginning of 2016 to 109 at the start of 2021.    Countries like Singapore have become active once again in the yacht sales ad brokerage market s after a slow period  during the pandemic that triggered international and regional border closures.   

In China, heightened living standards have led to the increasing demand for luxurious consumer goods, including in the boating industry. According to the China Transport Association’s Cruise Yacht Branch, the total number of yachts in China will increase from 38,100 to 163,510 between 2020 and 2025.   

China’s yacht market: an overview    

Few geographical regions offer the superyacht sector as much room for expansion as the Chinese market does. China has a vast and increasing pool of potential superyacht purchasers, although the country is still in the early stages of yachting growth in terms of domestic infrastructure and ownership. It could still be the right time for such a high-potential market to flourish due to factors like the increase in the country’s per capita purchasing power and that of its ultra-high-net-worth (UHNW) population.    

A 2021 wealth report revealed the 10 countries with the highest increase in their UHNW population in 2020 – the so-called ‘top 10 riders’ – with China leading the group at 16 percent growth. Furthermore, in 2021, China surpassed the United States to become the world’s first country with over 1,000 billionaires. The research highlighted that, despite the trade war and the pandemic, China was able to add 259 billionaires to its list, surpassing other nations like the US, India, and Germany.  

With a large number of prospective consumers, China’s relatively new market is even more attractive for foreign businesses. New yacht manufacturers, brand sales agents, yacht customers, private clubs, and exhibits have sprung up throughout the country in recent decades. Meanwhile, China’s boat manufacturing keeps rising steadily, from 29,100 units produced in 2011 to 48,300 units in 2015. China’s yacht industry is estimated to reach US$15.1 billion in 2027, accounting for 17.8 percent of the worldwide market and growing at a CAGR of 3.9 percent between 2020 and 2027.  

Less stringent regulations demonstrating the government’s commitment to the sector  

Many positive government efforts linked to the yachting industry and maritime activities, in general, have lately been enacted, and China is seeing a trend of loosening regulations. At the outset of this decade, two regulatory bodies – the Ministry of Transport and the Maritime Safety Administration (MSA) – announced new, more liberalized criteria and standards for yacht registration and overseas-yacht entry/exit procedures.   

More limitations on boat ownership have been abolished in recent years, and clear maritime traffic legislation has been adopted. The increase of the navigability range, the streamlining of the examination/approval processes, and the inclusion of non-resident yacht registrations are the three most recent major amendments to the rules. These key developments show the government’s commitment to the sector’s growth.  

Also, as wealthy Chinese yacht owners spend about 10 percent of the yacht’s value on maintenance, a large portion of this wealth is reinvested in the local economy. This not only is a great boost for regional GDP but is also in line with the government’s will of shifting its economy away from production to consumption. It has likely prompted Chinese officials to ease the cumbersome registration process for importing a yacht into the country, as well as the requirements for traveling between provinces. Yachts registered in Hong Kong and Macao, for example, were allowed to sail in China’s Pearl River Delta beginning 2018. The first cross-border sailing program has also increased boat orders in the Chinese Mainland by 20 percent to 30 percent.     

Accordingly, The State Council Office evaluated the Guidance on Tourism Industry Acceleration and drafted a National Tourism and Entertainment Outline (2013-2020) in which measures were taken to improve the infrastructure for yacht marinas and cruise terminals, as well as encourage the growth of tourism products.   

Yacht market more prosperous in certain regions than others: The case of Hainan Free Trade Zone   

The yacht business in Hainan Province flourished in 2021 – the Sanya Yachting Association revealed that Sanya, China’s tropical island and premier destination for luxury tourism, hosted almost 160,000 yacht trips, up 47 percent compared to 2020. Moreover, by the end of 2021, the number of new yachts registered reached 323, surging 202 percent year on year.  

This increase is partly due to the Overall Plan for the Construction of Hainan Free Trade Port (“the Masterplan”) that was released in June 2020, which stipulates that by 2025, there will be no tariffs on the island’s import of ships for transportation, tourism, and other purposes. Import tariffs, the value-added tax, and the consumption tax will all be waived for foreign exporters – which will effectively cut prices for foreign-made products.   

Success stories: Italian yacht businesses in China  

With 407 projects and super-yachts totalling 14,994 meters in development in 2021, Italy continues to top the annual report issued by the nautical newspaper ShowBoat International. Azimut-Benetti, Sanlorenzo, and Ferretti Group occupy the first, second, and third place, respectively. 

Despite having eight well-known brands, six shipyards, and over 170 years of history, Ferretti Group is today the only rival in its business to provide a comprehensive range of yachts ranging in size from 8 to 95 meters, and it is very active in China’s yacht market. After defaulting in 2009, the company was bought in 2012 by SHIG–Weichai Group, a large Chinese machinery manufacturer that currently controls 75 percent of the Italian shipbuilder.   

Following the acquisition, the company focused on growing into new markets. It made a great impression in the Asia-Pacific region in the first quarter of 2020, selling about US$73 million and negotiating two new dealership agreements for the distribution of its yachts in Malaysia, Cambodia, and Laos.   The Italian shipbuilder now has offices in Hong Kong and Shanghai, as well as a fully equipped after-sales facility, to meet the needs of its customers in the region. It also inked a Memorandum of Understanding with the Sanya Central Business District (SCBD) to collaborate with the government on the development of the local industry and China’s yacht market in general.

Other than larger and well-established companies, opportunities are there for everybody. According to Giovanni Lovisetti , Senior Associate on the International Business Advisory at Dezan Shira & Associates’ Milan Liaison office , “while huge companies can approach Asian markets by themselves – such as Fincantieri, who has already established a presence in Hainan – several smaller companies are just waiting for the right stimulus to take the first step towards Asia.” This might be the right time for them to step in.   

Roadblocks to the development of China’s yacht market   

High import taxes on foreign boats are one of the primary hurdles to the development of China’s yacht sector. The country has a 43.65 percent tax on boats – although recently reduced to 38.1 percent for motor yachts and 35.6 percent for sailing yachts above 8 meters. Furthermore, since the beginning of the government’s Anti-Corruption Campaign in 2012, potential customers have been reluctant to flaunt their wealth, preferring to keep a low profile and avoid public scrutiny.  

Another considerable barrier to Chinese high-income individuals buying private boats in the Mainland, is the lack of well-equipped marinas, ship repair yards, spare parts suppliers, and all other necessary (and expensive) infrastructure for yacht upkeep and mooring.  

Lastly, in 2015, China strengthened its regulations for yachts travelling in its national waters, restricting the number of passengers onboard to a maximum of 12 people – which made it impossible to arrange large parties and gatherings on board since the crew alone counts six members. Furthermore, China’s southern shoreline land is a particularly difficult marine zone due to ongoing territorial conflicts with neighboring states.  

As a result, several of the world’s most prestigious shipbuilders, like Sunseeker and Ferretti Group, have shuttered their showrooms in Mainland China or eliminated the country from their core target markets, despite their Chinese ownership. Regardless, those companies continue to sell boats to Chinese customers for delivery outside of the Mainland.  

Understanding the Chinese market and its cultural context  

Four purposes for boats are sailing, sports, leisure, and entertainment. For wealthy Chinese buyers, the latter would be the most common option. Given that the high-income Chinese population has little interest in sunbathing, the primary aim of these luxury boats in the contemporary setting would be to serve as a business frontier for hosting meetings, parties, and other business-related events. Yachting, however, has a bad cultural connotation as compared to other activities in a wealthy society.

According to market research, affluent Chinese people like golf, swimming, spas, and yoga as leisure activities, since they are well-known in Chinese culture for providing health benefits , and are thus appealing. Yachting, on the other hand, does not provide comparable physical benefits in the traditional Chinese context. Such cultural premises are fundamental when considering the gap between target customers and the industry culture.  

All things considered, it is not impossible for Chinese customers to shift their perspective since the country’s shopping habits and tastes are fast changing because of the ongoing rise of HNWIs. This means that tastes are subject to change and may be molded if an industry pursues them aggressively. In reality, a lack of brand familiarity and awareness provides first-mover brand opportunities.  

The future of China’s yacht industry    

All in all, between financial crackdowns and setting up zones such as Hainan FTZ, what is the right space for the yacht market to develop?   China’s financial crackdowns continued throughout 2021, with Beijing slamming for-profit education, tanking Ant Financial and Didi IPOs, or bringing the entertainment and gaming business under control, and harnessing local digital titans. As a result, in the era of “Common Prosperity,” it’s worth considering whether China’s yacht market can take off and grow.  

Yet, the central government’s desire to boost consumption and encourage tourism (including yacht tourism) creates unprecedented potential for the boat sector in the coming years, at least for small-to-mid-sized boats. The formation of the Hainan Free Trade Zone and the development of a new port have the potential to turn the island into a hub for China’s yacht culture. The number of registered boats in Sanya has increased from 10 to 500 in the previous decade alone, and yacht rental services have grown in popularity in China, enhancing yacht culture among both the Chinese middle and high-income classes.  

Further, according to the Guidelines on Accelerating the Development of Cruise and Yacht Equipment and the Industry (Guidelines) jointly released by the MIIT and other ministries on August 18, 2 0 22 , there are four development goals to achieve in the yacht industry by 2025: improving the design and construction capacity, refining the foundation of the equipment industry, expanding the demands in the consumer market, and strengthening cooperation and talent cultivation. Sanya is expected to be transformed into a home port for international cruises, outlining several international first-class cruise tourism destinations. Priority is attached to the development of water tourism resources in areas such as the Circum-Bohai Sea Economic Zone, the Guangdong-Hong Kong-Macao Greater Bay Area, the coastal city cluster that links Guangdong, Fujian and Zhejiang, the Hainan Free Trade Port, the Yangtze River Economic Belt, the Pearl River-West River Economic Belt, and the Grand Canal Cultural Belt. Meanwhile, Hainan is encouraged to pilot a yacht leasing business. The Guidelines also called for building teams of professional talents along the whole industry chain, covering the design, construction, operation, and management of cruises, yachts , and tourist passenger ships, as well as related tourism services and legal consulting.  

Catering to specific needs

With China’s yachting culture still in its infancy, yacht makers should concentrate on meeting the expectations of Chinese clientele, from emphasizing the design of entertaining rooms to making it easier to hire superyachts on a short-term basis. The scarcity of skilled Chinese Mandarin-speaking specialists and Chinese designers, on the other hand, is stifling the growth of China’s boat sector. Foreign shipbuilding businesses should tailor their offerings to the demands and preferences of Chinese boat buyers, keeping in mind lifestyle and cultural preferences.

For example, Chinese yacht owners seldom spend the night on board and prefer boats with leisure and recreational amenities like KTV (karaoke) rooms. Catering to such needs, which are specific to the Chinese clientele, is an essential part of challenging cultural differences and securing a spot in such a promising market.  

This article was first published on June 21, 2022 and last updated on September 29, 2022.

China Briefing is written and produced by Dezan Shira & Associates . The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at [email protected] . Dezan Shira & Associates has offices in Vietnam , Indonesia , Singapore , United States , Germany , Italy , India , and Russia , in addition to our trade research facilities along the Belt & Road Initiative . We also have partner firms assisting foreign investors in The Philippines , Malaysia , Thailand , Bangladesh .

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A yacht going astray in China

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Yachting in China

It is believed that the Chinese have a different perception of yachting compared to Europeans since they have not been exposed to it for a long time, lacking the necessary knowledge and experience. However, as time passes, the Chinese empire is starting to participate in water sports and recreation.

Despite the abundance of information available about China, much of what is happening in the country remains a mystery to us. We have tried to explore how the yachting industry on the mainland is faring, without touching on specific topics like Taiwan and Hong Kong, which merit a separate discussion.

Surprises in China

The number of affluent people in China is rapidly increasing. In 2013, China ranked second globally in terms of the number of millionaires – 2,378,000 people; an 82% increase from the previous year. Furthermore, half of these millionaires, according to research by Barclays and Ledbury Research, plan to move to other countries over the next five years, with less than 1% of them purchasing yachts. There are several reasons for this relatively low demand, including a negative attitude towards yacht purchases due to national culture, high taxes (up to 40% on imported vessels), and weak yacht legislation. Additionally, not every location is suitable for yachting, with coasts and large rivers heavily polluted and congested with commercial and other vessels. As such, many people prefer to keep their boats in Hong Kong, where the infrastructure is more developed.

Between 2006 and 2010, China’s yachting industry grew from virtually nothing to $3.4 billion (a 732% increase). There is a rapidly growing middle class in the country (15% of the working population, with 1% annual growth), and while many of these people cannot afford Rolls-Royces, they are interested in yachts and tend to purchase relatively inexpensive locally produced models costing $80-160 thousand.

At exhibitions, European shipyard and designer representatives have noted that the Chinese use yachts differently from Europeans. They are not inclined towards long cruises or accommodation on board, and yachts serve primarily for entertaining friends and business clients. Salons are used for karaoke, dancing, board games, and cinemas. As such, local preferences regarding layouts and design are quite distinct. After having fun, the Chinese typically go home and do not spend the night on board their yachts.

China also faces the issue of its reputation as a manufacturer of cheap consumer goods. Not all potential buyers are prepared to accept that their luxury yacht is made in China. Although the quality of Chinese boats is not always satisfactory by European and American standards, local shipyards are steadily improving in this regard, including by seeking the expertise of foreign specialists. Conversely, there are people who are willing to compromise on interior detailing but get a yacht that is longer than what can be built in Europe for their money. Despite this, China has already entered the top ten countries producing yachts over 24 meters long and is actively creating new brands with its own design, closing the gap with Europe not only in quality but also in price.

Market Conditions

Currently, the combined yacht market of Europe and the United States accounts for 95% of the world market. Although China recovered more quickly than the Old and New Worlds from the economic crisis of 2008, many large manufacturers believed that massive expansion into Asia would help them weather hard times. However, the growth of the yacht market in China began back in 2005, and by 2020, its turnover should reach $10 billion (about 100,000 yachts) according to the most conservative estimates, and up to $30 billion according to the most optimistic estimates. The question is whether this country can achieve it.

In 2013, China declared it the Year of Marine Tourism. The development plan for this industry emphasized the formation of yachting and related infrastructure. At that time, only about 3,000 yachts were registered in the country, which meant one vessel for every 452,000 people. For comparison, in Italy, this ratio is 1:100. However, it should be noted that due to imperfect legislation, a significant number of unregistered yachts are “living” in China.

China’s GDP growth has been declining over the past three years and stood at 7.4% in 2014, but the government sees this generally negative trend as an opportunity to take a breath. Among other factors, the introduction of an austerity regime in state-owned companies and anti-corruption programs has contributed to a slight decrease in the growth rate of the yacht market in China in recent years. Interestingly, some market players are happy about this because they believe that the industry will have time to comprehend what has been achieved, and people will have time to learn yachting.

At the same time, every year, the market is becoming increasingly fragmented. It is now more important for the Chinese not just to own a yacht (often for no particular reason, more to demonstrate status) but to purchase a vessel according to their needs, whether it is a fishing, racing, or pleasure boat. They are beginning to understand that, for example, an expedition yacht makes it possible to circumnavigate the world, and a catamaran can accommodate more guests. Against the backdrop of “status” owners, more and more people who fall in love with the ocean gradually acquire a boat to be closer to nature.

Manufacturing Sector

China’s yachting market is primarily driven by production, which is outpacing still-weak demand many times over. Just 15 years ago, the only “yachts” that were built in China were fiberglass river boats for transporting tourists, with no special interiors, master cabins, or other “excesses.” Today, the country, which is one of the three leaders in the world in commercial shipbuilding, has more than 300 shipyards that mainly build inexpensive boats up to 9 meters long. Small and medium-sized companies, in addition to pleasure yachts and boats, produce fishing trawlers and fast boats for work purposes. The absence of a narrow yachting specialization allows them to quickly switch during global economic upheavals, for example, to government orders while maintaining staff, production, and income. Whenever possible, they try to increase the length of their vessels, but the lion’s share of sales is still small (7–15 meters). Those shipyards that build exclusively yachts either belong to the state or foreigners. Today, the largest cluster of yacht shipbuilding is located in the city of Pingsha. Zhuhai Pingsha Yacht Industrial Park, founded in 2002, already has about 60 shipyards and component manufacturers.

As for foreigners, factories of about 50 foreign brands are located in China because production costs there are 20-30% lower than in Europe or the USA. Many outboard motor manufacturers, including Mercury Marine, Suzuki, and Yamaha, have long established their own facilities in China. In 2005, the Brunswick Corporation invested $12.6 million in a plant in Zhuhai, where the production of Sea Ray boats began (with 90% of the materials supplied from the USA).

In addition to shipyards, manufacturers of yacht components are growing by leaps and bounds in China. However, key components and assemblies, such as engines, are mostly imported as customers want to see brand-name equipment with developed service on their boats.

The trend toward Chinese production in the yachting industry is not just about cost savings. Some of the most renowned naval architects and designers have started collaborating with Chinese shipyards. For instance, the famous Dutch naval architect, Guido de Groot, has completed several projects with China’s Horizon Yachts. Meanwhile, Benetti, the Italian yacht builder, recently delivered a 50-meter yacht, FB703, built at the Benetti shipyard in Livorno, Italy, but designed for a Chinese owner. This could signify a shift from producing low-cost yachts for export to building high-end custom yachts for the domestic market.

In conclusion, while the Chinese yachting market is still in its early stages, the country’s potential as a major player in the global yacht industry cannot be ignored. Although demand has been relatively weak, production has continued to grow at a steady pace, and many manufacturers believe that investing in the Chinese market will pay off in the long run. As the Chinese become more knowledgeable about yachting and develop a greater appreciation for the sport, the country’s yachting industry is likely to experience significant growth in the coming years.

Import and Export

The yacht industry’s import and export volume in China grows every year, with over a hundred foreign brands being promoted by local dealers. Italy, the United Kingdom, and France are the leading exporters of pleasure craft to China.

European companies understand the potential of the Chinese market and are aware that it may not bring them significant profits in the short term. However, they aim to stake out a place and maximize brand awareness in preparation for the time when growth reaches its peak. Some companies have gone beyond simple marketing, such as the Italian Mondo Marine, which acquired a stake in the Chinese shipyard Sease Yacht Co. Ltd, making Sease Yacht a dealer for Mondo Marine and involved in the construction of three fiberglass yachts ranging from 54 to 88 feet.

The reverse process is equally intensive, with powerful Chinese corporations taking advantage of the 2008 crisis and actively buying up liquid assets in the US and Europe. This trend has fully affected the yachting industry. The Ferretti Group was the first major acquisition, with 75% acquired by the Shandong Heavy Industry Group – Weichai Group, followed by Sunseeker Yachts, which Dalian Wanda Group bought for €320 million, and Sanlorenzo, of which Sundiro Holding Group bought 22.99%, investing €20 million.

Every year, more Chinese companies participate in international exhibitions, though some European market participants still view them with suspicion. The Chinese International Boat Show (Shanghai) is considered the main one in China, followed by the exhibition in Hainan, which is the main event for superyachts in Asia. In addition to these, there are about 40 regional exhibitions.

State and Yachting

Seven years ago, China lacked a unified legislative framework governing the registration and operation of pleasure yachts. Since then, the state has taken important steps, such as the Chinese Classification Society adopting a set of rules in 2008 to certify and classify pleasure craft for subsequent registration. Many provinces now allow the registration of yachts owned by non-residents, and Hainan Island has become one of the most open and free-water areas in the country.

The issue of standardizing the training of yachting professionals and improving navigation safety on pleasure yachts is quite acute in China. The introduction of uniform standards for the licensing of boat masters in 2001, and the recognition of foreign “rights” with a procedure for obtaining a national license based on them, has been a relief to many owners. Significant progress has also been made in the field of vocational education, with Chinese manufacturers initiating a dialogue with technological universities about conducting specialized courses. Shanghai Jia Tong University, Maritime University, and Huazhong University have responded to the call and are interested in developing specialized training programs.

Yachting Infrastructure in China

Mainland China has abundant yachting opportunities, including 90,000 lakes, 6,500 islands, and 18,000 km of coastline. The number of marinas is increasing every year, with existing ones expanding capacity, and large yacht clubs are seeking membership in prestigious European organizations, such as the Yacht Club Monaco. However, some marinas are built to increase the value of the adjacent real estate, rather than addressing yachtsmen’s needs for mooring places. Despite the high cost of membership, owners do not always receive direct profits.

Hainan Island is one of the most appealing destinations for wealthy people due to its developed yachting infrastructure and excellent climate. About 40% of China’s registered yachts are located in the prestigious Hainan marinas.

Qingdao in the Shandong province on the coast of the East China Sea is also a valued destination for yachting. Ten years ago, yachts were not known in this city, but it now hosts the stages of the Volvo Ocean Race and Clipper Race. Haier, a major consumer electronics retailer headquartered in Qingdao, owns several corporate boats, including the Sunseeker 88, which is used exclusively for business receptions or as a mobile office.

Yachting is also becoming popular in the business environment as a team-building program, as it requires participants to demonstrate leadership qualities and the ability to think and act in difficult conditions, which is typical for the sport. Since 2007, China has actively developed sailing, and it hosts the international regatta CCIR (China Cup International Regatta); in 2014, 103 teams from 30 countries participated in the event, including Russia.

Chinese wisdom says that time is the best assistant in any business. The Chinese are gradually moving forward, and we are witnessing new developments in the yachting industry. East and West have already exchanged yachting embassies, and they have put forward their vanguards, waiting for the main forces to set in motion. When this happens, the world will witness the rise of Chinese yachting. For now, everything is just beginning in the Middle Kingdom.

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An increasing number of people in Sanya, south China's Hainan Province, are taking to the high seas on leisure cruises.

Once an activity for only the elite, sailing is now becoming an affordable sport for many.

"It has become really popular. Lots of people can afford it now. About 10 years ago, it would cost around 5,000 yuan ($764) to sail in a boat like this for three hours. But now, the price has dropped to around 2,000 yuan," captain Zhang Hongfa told CGTN.

Apart from soaking up the sun, you can also get some hands-on experience on these cruises.

With a 32,000-kilometer coastline, China is an ideal destination to become a leading yacht market.

For years, the development of a sailing culture in China has been hindered by many factors – a lack of dock infrastructure, a shortage of sailing boats and a crew to maintain them. However, with more support now from the government, such as pilot free trade zones (FTZs), there are signs the yacht industry could soon realize its potential.

"Ten years ago, there were less than 10 yachts in Sanya. Now we have 500 yachts registered in the marine bureau. In 2019, we had 100 yachts available for rent, and by 2020 we had more than 200. So we think that rental services will become more popular in China," said Yan Yaya, president assistant of China Visun Real Estate, which runs one of the biggest yacht companies in China.

"The policies in Hainan Province are great. We want to become a free trade island. Maybe in two or three years, if you buy a yacht in Sanya, you'll be exempt from a lot of tax, so it'll be cheaper than it was 10 years ago," she added.

As part of the plan to boost tourism, Hainan will become a pilot zone for the innovation and development of the yacht industry, after the central government's move to make Hainan a free trade zone. 

Yachts have been highlighted in the sweeping new policy, covering everything from shipping and technology to finance. Companies established within the Hainan Free Trade Zone will be taxed at only 15 percent.

For ordinary people who want a taste of the elite lifestyle, their ship has certainly come in!

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Within a vast and humid hangar in southern China, workers in blue overalls, face masks and straw hats scale the hull of a 108ft superyacht that will soon be completed. The factory once catered for local demand but many boats made here are now bound for Australia, Thailand or Europe.

The drive for exports by Heysea, one of China’s largest yachtmakers, is a sign of how companies are adapting to a downturn in China’s domestic yacht market, once seen as a great prospect for the global industry.

“The domestic market is not good,” says Allen Leng, Heysea’s chairman. “We are going overseas because of a lack of certainty in the Chinese market.”

The company sold about 20 super-yachts in 2012, the height of a yachting frenzy when international boatbuilders and brokers flocked to China for lavish shows where thousands of vessels were sold to a growing business elite.

At about the same time, two Chinese companies acquired European yachtmakers Ferretti and Sunseeker , which were both in trouble following the global financial crisis. The year after, according to Chinese media reports, the domestic industry had sales of Rmb4.15bn ($630m).

But the market was driven by companies snapping up boats to act as venues to host wealthy clients and government officials. A culture of private yachting failed to emerge.

That made the sector an obvious target for the crackdown on corruption championed by President Xi Jinping.

Legitimate corporate clients still exist — Heysea was planning to host potential buyers from property group Evergrande when the Financial Times visited — but they have shrunk dramatically. Several Chinese yachtmakers went bankrupt in the downturn, according to Mr Leng. Now sales are a quarter of what they were at the peak and the company expects to sell five superyachts this year.

“It was like a high-speed train that stops because, eventually, it has to stop,” says Delphine Lignières, co-founder of Hainan Rendez-Vous, a leading Chinese boat show.

Some of China’s largest boat makers, such as Sunbird, have switched to building tourist boats or coastguard ships, which are used to assert China’s contested territorial claims in the South and East China seas. Heysea says it is selling more vessels in other Asian and Pacific markets — including one to an Australian client who wanted pole-dancing equipment aboard. “It seemed a little lowbrow,” says Mr Leng.

There are signs the domestic market is beginning to recover. A tech boom centred around the southern Chinese city of Shenzhen has created a market, he says. “Now our clients are more diverse and the proportion of genuine yachting enthusiasts has increased  . . . but the overall number is still small.”

The same market is being chased by start-up Moana Yachts, which has been battling the industry downturn. Its co-founder Chris Wang, who studied boat design in New Zealand, strides across the deck of one of the company’s catamarans, sold for about $1m at a private marina near Shenzhen. “A lot of companies went bankrupt. But that was a chance for us,” he says.

The company has sold several boats this year to customers working mainly in finance and technology. “There is a change from companies to individuals who want to take family holidays,” he adds. The catamaran features a karaoke system, generally seen as a must-have for Chinese customers.

At the height of China’s yachting boom, “the [buyers] didn’t care about cost, they just wanted face. They would pay three times over the market price for foreign brands. It was highly irrational,” says Moana Yachts’ fellow co-founder Huang Jun.

Looking out at boats moored at the marina, Mr Huang says: “There are about 200 yachts here and about 70 per cent will not leave the yacht club. They were bought for face, and then buyers realised they had no use for them.”

Now the market is “more rational”, he says, “people actually want to use their boats.” But there is still a need for businesses to entertain customers. “Customers have a desire for face, they need the interiors to look good.”

Sales in China are hampered by a 44 per cent tax on imported motor yachts. Domestic manufacturers also pay hefty value added tax and duties on imported parts such as engines.

We want to move [yachting] from being an elite to a middle-class thing Allen Leng

On top of this tax burden, China lacks superyacht berths. Even for smaller boats, costs in private marinas remain prohibitively high. Chinese property companies rushed to build marinas during the boom, hoping to snap up corporate customers to pay mooring fees up to Rmb1m ($150,000) a year.

But with the downturn, that model has come under strain. The Xiangshan yacht club in the province of Fujian, billed as Asia’s largest, went bankrupt in 2014. Others have cut their prices by as much as half in recent years.

“We need public marinas built by the government,” says Heysea’s Mr Leng, echoing a widespread industry view that China should encourage sailing and its associated tourist trade as part of a drive towards a more consumption-based economy. “The government is paying attention,” he adds. “We want to move [yachting] from being an elite to a middle-class thing.”

There is uncertainty, though, over whether the Communist party will support the yachting sector while the latter retains an association with corrupt elites. “It will never be a mainstream thing,” Mr Leng admits, citing official statistics that there are only a few thousand registered yachts in mainland China.

Government rules that limit to 12 the number of passengers, including staff, are also stifling growth in the charter market. “Patrol boats come to check the numbers. That’s why people buy boats and ship them to Thailand, where they can do anything,” says Mr Wang.

Mike Simpson, a broker based in Hong Kong, says: “Owners are now moving their yachts to Thailand, which is a popular Chinese tourist destination and other parts of Southeast Asia where they may have business interests or a second residence. For some who can afford a larger superyacht, the Mediterranean is an option.”

For now, it appears, the future of Chinese yachting lies largely outside China itself.

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Sailors Stranded for Months as China Refuses to Let Ships Unload Australian Coal

China is vague about why vessels that carried Australian coal to its ports can’t unload their cargo. “We’re all depressed; our mental health is deteriorating,” one sailor said.

By Yan Zhuang

MELBOURNE, Australia — For the past six months, Virendrasinh Bhosale, a seafarer from India, has been trapped on a hunk of metal floating off China’s eastern coast.

He is desperate to see his 5-year-old son. “Every night I dream about him and I wake up crying in bed,” he says.

Mr. Bhosale is one of 23 crew members stuck aboard a cargo ship, the Jag Anand, off the port of Jingtang in Hebei Province since June. The ship is carrying about 160,000 tons of Australian coal but has not been granted clearance to unload its cargo.

Crews on an estimated 70 ships loaded with seven million to 10 million tons of Australian coal have not been allowed to disembark in China, according to commercial tracking data. China has cited various factors like the coronavirus and environmental issues. But Beijing has effectively banned Australian coal as tensions between the two countries intensify.

Now, the crewmen appear to be caught in the middle of a geopolitical feud with hundreds of millions of dollars of paid-for coal hanging in the balance.

Untangling who, or what company, is responsible for giving the vessels the green light to leave is difficult. But in the meantime, an estimated 1,400 seafarers are believed to be stranded, according to Australia’s maritime union, and the crews’ health is apparently deteriorating.

“Most of the guys, they don’t come out from their cabins and they are thinking about the worst case possible,” said Gaurav Singh, the navigating officer of the Anastasia, another ship languishing at a Chinese port, Caofeidian, about 31 miles southwest of the Jag Anand.

Eighteen crew members are on board, said Mr. Singh, who like Mr. Bhosale spoke to The New York Times via WhatsApp, a messaging service. “One of the guys tried to commit suicide,” he said, adding: “It’s terrifying. We all are scared.”

Last year, according to government statistics, Australia exported nearly $10.4 billion worth of coal to China. Though that coal helps fuel China’s voracious economic needs, deteriorating political ties have choked off one conduit.

In April, Australia called for an investigation into the origins of the coronavirus. A furious China followed over several months with informal bans on a host of Australian goods, including barley, wine and timber. In June, ships hauling Australian coal across the ocean began to be stranded at several Chinese ports, according to analysis from Bloomberg .

When asked at a news conference about the Jag Anand in November, the Chinese Foreign Ministry denied that it was barring the ship from leaving its waters, saying without elaborating that the vessel had not left because of commercial interests. When asked about the delay in processing the rest of the ships, a ministry spokesman, Zhao Lijian, spoke of concerns over “environmental protection standards.”

The Chinese government has also cited coronavirus concerns in banning foreign ships from performing crew changes at the country’s ports since April. So the pleas of the Jag Anand and the Anastasia to be allowed to conduct such changes have gone nowhere.

“Whether that’s a genuine concern or whether it’s something used by China as a pretext for not doing more is another question,” said Tim Stephens, a maritime law expert at the University of Sydney.

As for Australia, the country’s resources minister, Keith Pitt, told The Sydney Morning Herald newspaper last month that the dispute was mainly “a matter for the companies involved.” This month, the trade minister at the time, Simon Birmingham, told Sky News that his department was making “representations” to its Chinese counterparts but noted that the Australian exporters had already been paid, meaning the transaction “has predominantly already taken place, from an Australian perspective.”

The stranded vessels fly international flags but are caught in a web of multinational companies, contractors and subcontractors — a tangle of competing interests that complicates the situation.

The Jag Anand is owned by an Indian company, Great Eastern Shipping. While Great Eastern Shipping employed the crew, it says it cannot unilaterally let the ship leave because the vessel had been chartered out to another company, Cargill, which is based in Minneapolis. It, in turn, had sub-chartered the Jag Anand out to another company.

On the other end of the chain are the buyers for the Australian coal on the Jag Anand: the Chinese company Tangshan Baichi Trading. It bought the cargo from an Australian supplier, Anglo American. When contacted, Great Eastern Shipping and Cargill said the buyer was ultimately responsible for deciding if the Jag Anand could move away from the Jingtang port.

“It’s local law that you have to get approval from the port authority to leave, and one of the conditions of that is that you need approval from the receiver,” said Jan Dieleman, president of Cargill’s ocean transport business. He noted that the receiver could have sold the cargo to others, further complicating the approval process.

Phone calls over two days to contact Tangshan Baichi Trading went unanswered.

The Anastasia is in a similar situation. It flies the Panamanian flag but is owned by Mediterranean Shipping from Switzerland, which chartered out the ship to Jiangsu Steamship, a Chinese company, officials said. The intended receiver of its coal is E-Commodities Holding, incorporated in the British Virgin Islands and listed on the Hong Kong Stock Exchange.

Each company in the chain said it communicated only with one or two other parties it directly dealt with, and they often said they were unclear about the names of others involved. It’s a deliberately convoluted system, according to Dean Summers of the Maritime Union of Australia.

“Everyone points to the person next to them, and no one takes responsibility,” he said.

A week ago, when China’s state-owned Global Times reported that China’s National Development and Reform Commission had given approval for 10 major power enterprises to import coal “without clearance restrictions, except for Australia,” many in Australia interpreted it as formalizing China’s unofficial ban. (The Global Times article has since been deleted from its website.)

For the Jag Anand, it was the “biggest positive,” said a spokeswoman from Great Eastern Shipping, because the mystery of whether the coal can be unloaded in China at all had apparently been solved. Now, she said, the receiver is looking for a new buyer in another country. If that happens, the crew will be able to disembark at another port.

But to others, the situation is less clear-cut.

Kevin He, the captain of Jiangsu Steamship, the charterer of the Anastasia, said he had not been aware that China banned Australian coal because he had not received any official notification. Mediterranean Shipping, the owner of the Anastasia, also said it had not been aware of any moves to find new buyers for the coal on the ship.

The men on the ships say they are losing hope. On the Jag Anand, Mr. Bhosale said, some have chronic conditions like diabetes and hypertension and their medications have run out. Others have injuries that have been untreated for months. One crew member’s father recently died, and he was unable to attend the funeral. The man’s mother is sick with cancer, Mr. Bhosale said, adding, “We’re all depressed; our mental health is deteriorating.”

A Twitter account documenting the plight of the Anastasia and the Jag Anand has sprung up. Relatives of the men have started a petition to bring them home. But the days stretch out in front of them with no end in sight, and their ships have become de facto prisons.

“We just want to go home,” said Mr. Singh, the Anastasia’s navigating officer. “We haven’t made any mistakes; we have not committed any crimes. We are getting punishment for things we have not done. Why should we suffer for the diplomatic war between two countries?”

Liu Yi contributed research.

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Chinese coast guard ships corral a Philippine civilian boat chartered by the Philippine navy to deliver supplies to the Philippine navy ship BRP Sierra Madre in the disputed South China Sea on Aug. 22. (Ted Aljibe/AFP/Getty Images)

Surges in military aggression near Taiwan since President Lai Ching-te’s inauguration last month are defining a provocative new Chinese military posture. At the same time, violent skirmishes with the Philippines are breaking out in the South China Sea, around Second Thomas Shoal . Beijing’s new commitment to escalation is a marked departure from its signature gray-zone activities , which now raises unprecedented issues for Washington.

Namely, how does Beijing’s new behavior in these two spaces fit into its broader strategic ambitions? And, more importantly, what happens next?

The most recent Chinese military demonstration followed the inaugural speech by Taiwan’s newly elected president on May 20 . Lai has been vilified in Beijing and, as such, China didn’t miss the opportunity to express dissatisfaction with a show of force.

For a few days, China’s military presence in the Taiwan Strait remained relatively normal. That changed on May 24, when China began a series of military drills surrounding Taiwan called Joint Sword -2024A.

The drills produced this year’s highest recorded activity of People’s Liberation Army Air Force aircraft near Taiwan. Of the 62 aircraft detected, 47 crossed the median line in the Taiwan Strait—an even more provocative action.

China’s People’s Liberation Army Navy activity also peaked on May 25, with 27 ships active around Taiwan. That’s the highest single-day PLAN activity since recordkeeping began in November 2020—even exceeding the naval response to then-House Speaker Nancy Pelosi’s Taiwan trip in 2022. It also represented an almost 400% increase over the 30-day average.

Furthermore, the three-day delay before Joint Sword began was instructive. Looking at past events triggering a military reaction from Beijing, a pattern emerges. Even when Beijing is caught off-guard, as it seems it was with Lai’s speech, it can respond and sustain an elevated military presence around Taiwan within several days.

By May 25, Chinese military activity began winding down, only to spike again in response to a U.S. delegation to Taiwan on May 26 led by the House Foreign Affairs Committee Chairman Rep. Michael McCaul, R-Texas.

The visit shouldn’t have been a surprise to Beijing, but it took about four days to see the expected Chinese military reaction. On May 30, the PLAAF dispatched 38 aircraft around Taiwan, with 28 crossing the median line.

Between June 21 and 27, another surge in activity was witnessed. The highest day saw 41 Chinese aircraft active around Taiwan, with 31 crossing the strait’s median line. That corresponded to a 10-day average of more than 17 median-line crossings, a figure not seen since August 2022.

The surge seemingly coincided with clashes at Second Thomas Shoal, but also aligns with increased military training and exercises typically seen in the summer.

Additionally, in a stark departure from the past, PLAAF aircraft have crossed the median line almost 70% of the days this year. The consistency has helped normalize this aggressive posture . Before September 2020, the PLA had only crossed the median line of the Taiwan Strait four times since the demarcation was established in 1954.

Now, each military escalation is perceived as less threatening since the baseline of what is considered ‘normal activity’ has gradually changed—a mindset that complicates predictive and timely action. When military escalations are normalized, one’s threat calculus also adjusts, but it does so to the advantage of the aggressor , giving less time for the defender to react.

This troubling trend is broader and involves more than aircraft and warships. On June 18, a Chinese nuclear-armed submarine surfaced in the Taiwan Strait, a possible Jin-class ballistic missile submarine based on Hainan Island. That was only the fourth time a submarine was spotted in the strait since 2019.

Moreover, China Coast Guard officials illegally boarded a Taiwanese tourist boat in an act of intimidation near Taiwan’s Kinmen Island—another departure from past behavior this year. Prior to that, China always maintained respect for Taiwan’s control of the waters around Kinmen. It follows the introduction of a 2021 CCG law that authorizes deadly force and a new regulation allowing foreigners to be apprehended in China’s declared waters.

This leads us to consider developments in the South China Sea—another area that is becoming increasingly central to China’s regional priorities.

After decades of concerted efforts, the South China Sea is increasingly resembling a Chinese lake. In the past decade, the PLA has developed several artificial islands that sustain naval and paramilitary presence at numerous contested features far from China.

That has occurred despite assurances in 2015 by Chinese leader Xi Jinping to then-President Barack Obama that China had “no intention to militarize” the artificial islands. Those artificial islands have since sustained the increasingly provocative use of PLAN, CCG, and maritime militia in the South China Sea.

Beijing has also strategically imposed fishing bans to reportedly better leverage its repurposed fishing fleets as a maritime militia . All of this has resulted in the increasing frequency of confrontations, injuries, and damage to other nations’ maritime forces.

That’s unsustainable, as escalations can quickly unfold into more serious conflicts. President Ferdinand Marcos Jr. of the Philippines has already warned that if a Filipino is killed, it will be understood as an act of war: “Almost certainly, it’s going to be a redline .”

Insights gained from analyzing data sets from the South China Sea Data Initiative provide a helpful perspective into the general trend of China’s South China Sea activities. For example, the 2015 monthly average of reported instances of Chinese maritime activity in the South China Sea stood at about four. In 2019, the monthly average was about 26, including the strategically important Luzon Strait between Taiwan and the Philippines.

This snapshot provides a clear, data-driven rebuttal to Xi’s assurances to Obama.

While open-source data further documenting this trend is lacking, China’s most recent escalation serves as an example of an even larger trend. On June 19, unprecedented hostility unfolded around Second Thomas Shoal, a now familiar hot spot. This time, Chinese coast guard vessels engaged in a high-speed ramming of Philippine vessels and even brandished axes and used knives to damage Philippine naval assets and puncture their inflatable vessels— severely injuring one Philippine sailor.

Such a clear display of aggression was, until recently, unexpected and uncharacteristic in China’s established pattern of gray-zone provocations.

Also alarming was the movement of a large amphibious warship (Type 075) with Chinese marines and helicopters onboard to nearby Sabina Shoal—only 36 miles away. Beijing’s increased appetite for risk should inform thinking about its  willingness to act against Taiwan .

U.S. and allied responses to Chinese provocations in the South China Sea certainly inform Beijing’s broader strategic calculus.

Beijing’s recent South China Sea activity remains a subject of debate among analysts . However, a critical possibility is often left unconsidered: China is probing to test the limits of U.S. support while refining potential operational responses to a future confrontation.

That would explain why China intentionally targets the Philippines, the only country with maritime disputes in Southeast Asia that shares a mutual defense treaty with the U.S. Insight gained from these frequent provocations would likely inform Chinese assessments of how the U.S. might respond in the early stages of a kinetic conflict—including over Taiwan.

Beijing is becoming increasingly brazen within the waters it claims as its own. The departures from what were already unsettling “norms” should worry U.S. policymakers. China shows no sign of making peace in the Taiwan Strait or the South China Sea.

Given Xi’s penchant for using the PLA to send geopolitical signals and influence events overseas, several impending milestones are fast approaching.

Rim of the Pacific, a major international maritime warfare exercise, will run from now until Aug. 1 with numerous at-sea drills in the waters around Hawaii. Of course, China is also watching America’s November elections.

Given these upcoming opportunities and historical precedents, China is likely to push the envelope even harder and test American resolve more directly. Unless Washington matches diplomatic words with military action and prioritizes the region, Beijing has no reason to slow down.

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