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The Pleasure Boat Market ofChina

Juliet LuApril 2009

The Pleasure Boat Market of China

Summary:

With the rapid growth of the economy, China's recreational marine market is forecastto expand sharply in the coming years. In 2008, China imported over 50 million USdollars worth of yachts and pleasure vessels, which was an increase of 72.6%compared with 2007. (China Customs) Based on the confidence that pleasure boats

will become a part of life style in the countrys expanding wealthy and the middle-class, provincial governments, property developers and boat builders are allinvesting heavily in this industry. Business experts estimate that the market will pickup speed in the next few years, and the overall market size will reach US$10billionover the next decade, which presents significant opportunities for the exports of U.S.pleasure boats, accessories, marina planning and construction materials.

Tariff Rate:Compared with the import duty rate of luxury cars (MFN rate: 34.2%-37.6%), the tarifffor pleasure boat is relatively low with fewer trade barriers. According to the Protocol onthe Accession of the Peoples Republic of China, the non-tariff measures of importing

boats and vessels was eliminated in 2004.

HS Description of Products Final Bound rate (2002)8903.9100 Sailboats with or without auxiliary motor 8%8903.1000 Inflatable, other 10%8903.9200 Motorboats, other than outboard

motorboats10.5%

8903.9900 Other 10%* VAT (value Added Tax) = 17%

Original: Protocol on the Accession of the Peoples Republic of China, WTO Agreement(Annex 8: Schedule CLII - Peoples Republic of China)

Let us help you export. export.gov

The U.S. Commercial Service Your global business partner. 800-USA-TRADE


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China Exports to World (Value and Volume)HS 8903: Yachts & Other Vessels for Pleasure or Sports; Rowing Boats and Canoes

Let us help you export. export.govThe U.S. Commercial Service Your global business partner. 800-USA-TRADE

0

500000

1000000

1500000

2000000

2500000

2006 2007 2008

852,649

1,589,264

2,209,502

177,130

1,057,426

2,163,693

Value(100USD)

Volume

(Sourcing: Global Trade Atlas)

Market share by country:

The United States is one of the market leaders here with over 24% of the market sharein 2008. The import value from U.S. was over 12 million US dollars last year, which isan increase of 55 percent compared with 2007. European companies aggressivelyentered the Chinese market and their market share has been increased rapidly in thelast two years. Italy ranked the first in the sale value for the first time in 2008 althoughthe quantity is still quite low which mainly because of the strong sales of the most

luxury motor boats made in Italy , such as Azimut-Benetti, Ferretti and InRizzardi. U.K.and France took the third and fifth place and the import value was 5.29 million USdollars and 2.67million US dollars.


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China Imports from the world by value 2008HS 8903: Yachts & Other Vessels for Pleasure or Sports; Rowing Boats and Canoes

35.66

24.01

10.38

7.52

5.24

4.58

4.53 2.2

1.36

1.1

1.03Italy

UnitedStatesUnitedKingdomHongKongFrance

Netherlands

Taiwan

Germany

Japan

Canada


China Imports from the world by volume 2006- 2008HS 8903: Yachts & Other Vessels for Pleasure or Sports; Rowing Boats and Canoes


22

872

58 2276

23 5 60 36

85

16

491

25 6

107

7 10 16

83

532

26

358

50 0 25 7 0 21 48

223

0100

200

300

400

500

600

700

800

900

1000

2008

2007

2006



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China Imports from U.S. (2006-2008)

HSCode Description 2006 2007 2008USD Volume USD Volume USD Volume

8903

Yacht&OtherPleasureVessels 4,197,950 358 7,867,433 491 12,227,074 872

890399 Other 3,491,027 323 6,264,313 356 11,319,094 828

890392

Motorboats,otherthanoutboardmotorboats 570,408 6 1,316,172 11 768,570 15

890391 Sailboats 89,653 10 141,354 17 134,815 12890310 Inflatable,other 46,862 19 145,594 107 4,595 17

(Sourcing: China Customs)

Yacht Manufacturing:

The Yacht building industry is becoming an important part of Chinas Shipbuildingindustry. At present, China has over 300 FRP boat builders, which are mainly scatteredin coastal areas such as Yangtze River Delta and Pearl River Delta. More than 60% ofthe yachts built in China are exported. Limited by the deficiency of qualified designerand accessories supply chain, domestic pleasure boats manufacturers are mainlyengaged in processing and assembling the imported materials and equipment.Currently, most accessories and equipment such as engines, generating sets, steeringsystems, communication and navigation facilities rely on imports. Considering the hugemarket potential, China has put a lot of emphasis on the development of the

recreational marine industry. CSSC, Chinas leading shipbuilding group plans toconstruct Chinas largest yacht-building base in Shanghai. The first phase will cover anarea of one square Kilometer in the south of Fengxian District in Shanghai.

However, as an emerging industry, Chinese yacht builders still face a lot of challengesand deficiencies including small manufacturing scale, lack of specialized engineers andrelated equipment, weak management, unprofessional sales network, insufficiency oflaws and regulations.


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Based on the inquires from Chinese firms that are interested in marina related productsfrom the U.S., we believe that the China recreational marine market holds promisingmarket potential for U.S. manufacturers of pleasure boats, parts and accessories,marina planning and construction materials.

Marina Development Plan

Although there are presently only a handful of marinas in China, dozens more are

under construction or in planning. Many luxury residences in major cities incorporatewaterways and boating facilities in their developments.

The Shanghai municipal government is expected to announce plans for the citysyachting industry development over the next two decades. The success ofShanghai's bid to host the 2010 World Expo will push the boat industry to developmore rapidly. The Shanghai Government has decided to build marinas and cruisingshipping centers along the downtown river as part of the efforts to remake Shanghaiinto a world-class city.

Other marina related development plan in Shanghai area include:

-Dianshan Lake, connecting Shanghai and Jiangsu Province, is one of the popularplaces for the development of yacht club and other aquatic entertainment facilities.-The ambitious New Harbour City development is creating a man-made lake, namedWater drop, facilities will include a yacht club, in accordance with city planing.-The Fengxian district: located in the South of Shanghai, neighboring Hangzhou Bay,which has unique geographical and natural features for boating and yacht industry. TheU.S. based Long Runn Investment Group has cooperated with the Fengxian districtgovernment to develop Chinas first marina-based community-Shanghai Marina City-covering 650 acres at the convergence of Huangpu river and Punna Canal.

Other cities and areas that either have on-going marina projects, or are in the

planning process include Zhoushan, Qingdao ,Dalian, Ningbo, Beihai, Dongguan,Shengzhen and Hainan Island.


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China Intl Boat Show 2009

The China (Shanghai) International Boat Show (CIBS) the largest boat show in Chinahosts its 14th edition this April in Shanghai, the exhibition covers over 30,000 m2 withup to 380 exhibitors and over 100 boats on display in the downtown historical venue,the Shanghai Exhibition Center. With a comprehensive display of China's boat industrychain, CIBS offers several exhibition halls featuring thousands of products coveringequipment, technology, supplies and service.

On behalf of the U.S. Commercial Service we would like to welcome you to the China(Shanghai) International Boat Show 2009. Our mission in Shanghai is to assist U.S.firms doing business in China. We will staff an information booth in the Central Hall(C073) to provide assistance to American companies and Chinese clients at the show.We plan to make ourselves available to answers questions, offer advice and supportyour networking activities throughout the event.

(86-21) 6279-7630(86-21) 6279-7639Email: [email protected]://www.buyusa.gov/china/en
http://www.buyusa.gov/china/enhttp://www.buyusa.gov/china/en


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