Shikumisen was an agreement whereby foreign shipping companies, mainly from Hong Kong, built a ship in Japan, the financing being based on a long-term charter of a Japanese shipping company or shipper called charter-back. Japanese shipbuilders indirectly funded the ships built by them through the shippers and shipping companies. Although the charter-back construction occurs more frequently, the scale at which this occurred in the shikumisen system was unprecedented.
With the outbreak of the Korean War in 1950, Japan began to see strong economic growth that continued until the seventies. This created a large demand for ship space. The government stimulated this through the Japanese Development Bank (Japan Development Bank, JDB), which financed up to 65% of construction costs, with a smaller share for commercial banks. The company's own contribution could thus be limited to only 5%.
Nevertheless, this was not enough to meet the demand for ship space. In addition, Japanese merchants, shippers and shipbuilders worked together as an alternative. To this end, Japanese shipmen closed off charters with foreign shipping companies that built their ships in Japan. This had a number of advantages. For example, the mainly Hong Kong shipping companies could fly cheaply, especially Liberian, which meant no obligation for expensive Japanese crew. In addition, foreigners could claim very favorable terms with the Export-Import Bank for the financing of new construction in Japan. In 1971, 70% of the new building price could be obtained at 8.5%, repayable in 7 years.
With this system, the market share of Japanese shoppers and merchants could be increased, but it was especially beneficial for Japanese shipbuilders who were allowed to build all these ships. While at the beginning of the 1970s 399 ships of 11,062,000 dwt were chartered in this way, this peaked in 1976 for 1199 ships of a total of 50,609,000 dwt. It also brought great prosperity to the Hong Kong ship magnets, of which Yue-Kong Pao became the best-known, and with its Worldwide Shipping Group with over 20 million tons some time the biggest ship owner.
After 1975, Japanese banks were allowed to open offices abroad. This would allow foreign subsidiaries of Japanese shipping companies to be able to sail with cheap crews, which would allow Hong Kong shipowners to pass and use of the shikumisen system. Literature
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